Spain’s Proposed 100% Property Tax for British Buyers: What is Actually Happening?

Headlines suggesting that British buyers could face a 100% tax when purchasing property in Spain have understandably caused concern amongst potential buyers considering investing in a second home or moving to Spain. If it were to go ahead, a tax bill of this size would completely change the figures.

But it is important to remember that the headline doesn’t reflect the current law or taxes. If you are British and buying property in Spain in 2026, you do not currently have to pay a 100% property tax. The Spanish Government did announce a proposal to substantially increase the tax charged to certain foreign property buyers, potentially to as much as 100% of the property’s value. However, the proposal was aimed specifically at non-EU nationals who are also non-resident in Spain, and as of August 2026, it has not become law.

To dispel any misconceptions, Maggie Panet, Head of PCC Legal, provides an update on the situation at the moment, with regards to who could eventually be affected and whether British buyers be changing their plans.

Where did the 100% property tax proposal come from?

The proposal was announced by Spanish Prime Minister Pedro Sánchez on 13 January 2025 as part of a wider package of measures intended to tackle Spain’s housing shortage.  The Government said it wanted to increase the tax burden on property purchases made by non-EU, non-resident buyers, potentially to as much as 100% of the value of the property.

As part of its explanation, the Spanish Government stated that approximately 27,000 homes were purchased by non-EU non-residents in Spain during 2023. Prime Minister Pedro Sánchez said these purchases were made primarily for investment rather than as primary homes. What was announced, however, was a political proposal, not a finished piece of tax legislation. There was no final law setting out how the tax would be calculated, what exemptions might apply, when it would begin or exactly how a buyer’s residency would be assessed.

Who could the proposal affect?

The proposal was aimed at non-EU citizens who are not resident in Spain, rather than all British buyers. Since Brexit, British citizens are classed as non-EU nationals. However, a British person who lives legally in Spain is in a different position from someone who lives in the UK and is buying a holiday home or investment property in Spain.

This means a buyer’s residency status could be important if the proposal becomes law. It is highly advisable to get individual tax advice, as the final rules have not yet been published. We still do not know exactly how “non-resident” would be defined or what proof buyers may need to provide.

So, has anything actually changed?

The proposed 100% property tax has not become law, and throughout 2025 the Spanish Government was still considering how a measure of this kind could be introduced, including the possibility of creating a new national tax.

By January 2026, the Ministry of Housing was still referring to these measures as being “on the table”, which means the proposal had not yet reached the point of being formally approved, published in the Boletín Oficial del Estado and brought into force.

Other housing policies have moved further during the same period. For example, Spain’s property-linked Golden Visa ended on 3 April 2025 following legislative changes, but the proposed 100% property tax has not progressed in the same way.

If you are thinking about buying a property in Spain, make your decisions based on the law as it stands today. If you are worried that future changes could affect your purchase, talking to a tax planning advisor can help you understand your position before you decide to delay or change your plans.

What taxes do British buyers currently pay in Andalucía?

If you are buying property on the Costa del Sol today, your purchase is still taxed under the existing Spanish and Andalusian rules, not the proposed 100% measure.

The main purchase taxes are:

• Resale properties: Andalucía’s general Property Transfer Tax, or ITP, rate is 7%, although reduced rates may apply in certain circumstances.
• New-build residential properties: VAT is generally charged at 10%.
• New-build purchases in Andalucía: Stamp Duty, known as AJD, is generally charged at 1.2%, with some reduced rates available.
• Purchasing from a non-resident seller: the buyer will normally need to withhold 3% of the purchase price and pay it to the Spanish Tax Agency on account of the seller’s Non-Resident Income Tax. This is a withholding obligation, not an additional 3% tax on the buyer.

There will also be notary fees, Land Registry costs and professional conveyancing costs. A Spanish property lawyer can calculate the taxes and likely legal fees for buying a house before the purchase proceeds, so the buyer has a realistic picture of the total cost.

Should British buyers put their plans on hold?

As experienced real estate lawyers, we can confirm that the proposed tax increase alone is not a reason to put a property purchase on hold. There is currently no 100% tax in force, and there is no guarantee that any future legislation would be introduced in exactly the form originally announced.

If the proposal does go ahead, the final rules could look very different. The rate could change, exemptions could be introduced, the group of buyers affected could be narrowed, or transitional arrangements could apply to purchases already underway.  

That does not mean British buyers should ignore the proposal altogether, it simply means that it is important to take advice from a specialist property lawyer and tax advisor. However, it is important to make the distinction between keeping an eye whether the Government continues to further explore the 100% tax rate for non-Europeans, and prematurely restructuring your plans around a tax that has not yet become law.

As explained by Maggie Panet: “The concern created by the 100% tax headlines is understandable, but buyers need to separate the proposal from the law that currently applies. The measure was not proposed for all British buyers and it is not currently in force. Before changing plans, the first step should be to establish the buyer’s actual residency position and assess the purchase under the legislation that applies today. Our experienced Spanish property lawyers will be monitoring any developments closely, so we can advise clients promptly if the position changes and take appropriate steps to protect their interests.”

Why it’s crucial to take legal advice before purchasing

The proposed tax changes also serve as a reminder that buying property in Spain is not only about checking the property itself. The buyer’s residency and tax status can also affect which rules apply to the purchase.

As part of the property conveyancing process, a real estate lawyer should check the ownership, Land Registry information, planning position, debts and any other legal issues attached to the property. For British buyers, they should also consider the buyer’s residency position and explain whether any current or future tax rules could apply to their particular circumstances.

Good conveyancing services should therefore give buyers certainty on two things: whether the property is legally sound and if their own residency or tax status will affect the transaction.  Taking legal advice before making a decision helps buyers act on the rules that actually apply to them, rather than on speculation on what may or may not happen in the future.

What happens next?

For now, buyers should focus on the law as it currently stands rather than make decisions based on headlines. If the Spanish Government formally moves forward with the proposal, the draft legislation will provide the detail that is currently missing (and required before action can be taken), including who would be affected, the rate, any exemptions and when the new rules could take effect. Any changes would also need to pass through Spain’s legislative process before becoming law.

In the meantime, British buyers considering a property purchase in Spain should seek advice on their actual residency and tax status, as well as the proposed purchase, before changing or postponing their plans because of media reports.

Buying in Spain? Check your position before changing your plans

If you are considering buying property in Spain and worried about the proposed 100% tax, unsure how your residency status or the proposed tax changes could affect you, contact PCC Legal for advice based on your individual circumstances before making a decision.

If you are considering purchasing property in Spain and, the important question is not simply whether you hold a British passport. Your residency status and the circumstances of the proposed purchase matter. PCC Legal can review your position, explain the property taxes currently applicable and handle the conveyancing and legal checks associated with the purchase.

Before delaying, cancelling or restructuring a Spanish property purchase because of reports about the proposed 100% tax, speak to PCC Legal about how the current law applies to your particular circumstances.

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