Sanchez claimed that housing prices in Europe have risen by 48 per cent in the last 10 years, almost twice as much as household income. He thinks the “unprecedented” measure is necessary to meet the country’s housing emergency.  

Sanchez told an economic forum in Madrid that non-EU residents bought 27,000 properties in Spain in 2023, not to live in but to make money from them. In Spain, people are classed as non-residents if they live in the country for less than 183 days in a year. Statistics from the Spanish property registry also show that the total number of sales to foreigners, including people from inside the EU, makes up around 15 per cent of the Spanish housing market - that's 87,000 out of 583,000 sales in 2023.

The measure comes at a time when Spain is also due to phase out its residency-by-investment scheme, aka "golden visa," which had been in place along with scores of others offered by countries to attract inward flows of capital. Rising residential house prices have at times sparked political pushback in countries such as Portugal and Canada. The change also comes after Italy moved more than a year ago to double the amount charged for its HNW residency scheme. Meanwhile, the UK government has shut its resident non-domicile system and replaced it with a new system, causing fears of a net exodus of HNW individuals. 

The move by Spain is not a shock, but wealth managers and advisors said there could be problems down the line for Spain. 

Matthew Sperry, private wealth partner at , knows how popular it is for its lifestyle and climate. “However, Spain’s proposed 100 per cent tax on property purchases by non-EU buyers could shift interest towards alternatives like Portugal, Cyprus, or Greece,” De Santis Bo said. Non-EU destinations like Montenegro and Morrocco could also become more attractive.

"Also, in response to the prime minister's claim that people are buying ‘mainly for speculation,’ this has not been my experience, instead it’s about creating a home or enjoying retirement,” De Santis Bo added.  He plans to monitor these changes to help clients make informed decisions and consider alternative destinations if needed.

Sanchez did not provide more details on how the tax would work or a timeline for presenting it to parliament for approval.