British homebuyers seeking properties in Europe face unprecedented challenges as multiple EU nations consider following Spain's radical move to impose a 100 per cent tax on non-EU property purchases, experts have suggested.
Spain's Government has announced plans to implement the tax measure on real estate bought by non-EU residents, including British buyers, as part of efforts to tackle its housing crisis.The policy could trigger similar measures across popular British holiday home destinations, with France, Greece, and Portugal all weighing comparable restrictions, according to relocation specialists at 1st Move International removals.
The potential domino effect threatens to reshape the landscape for UK residents seeking homes abroad.
The Spanish Prime Minister Pedro Sánchez unveiled the tax proposal as part of a dozen measures aimed at addressing soaring housing costs.
Mike Harvey, Managing Director at 1st Move International warned: "Spain's decision to impose taxes on foreign property buyers has set a significant precedent, with other high-tourist countries like France, Greece, and Portugal now considering similar measures.
"While these policies aim to address housing shortages, they could have unintended consequences—impacting digital nomads, retirees, and international buyers who contribute to local economies."
While Spain's proposed policies aim to address housing shortages, they could have unintended consequences
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Sánchez highlighted that in 2023 alone, non-EU residents purchased approximately 27,000 properties in Spain.
He said: "They didn't do it to live in them, they didn't do it for their families to have a place to live, they did it to speculate." He described the proposed 100 per cent tax as "unprecedented" in Spanish history.
The measure still requires parliamentary approval, with some analysts suggesting it may face legislative hurdles.
Other European nations are closely watching Spain's bold move, with potential ripple effects across popular tourist destinations, Harvey explained.
France's tourism sector, which generated $68.6billion in 2023, could face significant strain if similar measures are implemented.
Greece is already taking steps to address housing pressures, having banned new short-term rental licenses in key Athens areas.
Portugal, where tourism contributes to 15 per cent of GDP and reached €25.1bn in 2023, risks dampening its projected revenue growth of €66.5bn by 2034 if it introduces comparable taxes.
The impact on British buyers could be particularly severe, as Spain, Portugal, Germany, and France rank among the top 10 relocation destinations for UK citizens.
Harvey added: "A 100 per cent tax on foreign buyers could hurt Greece's competitiveness and economic stability."
Similar concerns extend to France, where additional taxes could strain the property market and tourism sector. Portugal's appeal to British buyers may also diminish significantly under new tax measures.
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These changes could force many British property seekers to reconsider their investment plans in traditional European hotspots.
As British buyers seek alternatives, Cyprus is emerging as an increasingly attractive destination.
The Mediterranean island ranks as the sixth most popular destination for British relocations between 2022 and 2024, according to 1st Move International data.
Harvey said: "Cyprus is becoming an increasingly popular choice for Brits looking to relocate. Our internal data shows it was the sixth most sought-after destination between 2022 and 2024.
"The island offers a great Mediterranean lifestyle, featuring sunny weather, affordable living, and a welcoming environment.
"With English widely spoken, expat-friendly tax perks, and a relaxed yet lively atmosphere, it’s clear why Cyprus is gaining traction as a top destination for those seeking a vibrant lifestyle abroad."
The shifting landscape of European property investment is prompting British buyers to explore new horizons beyond traditional destinations.
Current data shows the United States, Australia, and the United Arab Emirates leading the top destinations for British relocations.
Canada and New Zealand round out the top five, while Cyprus maintains its strong position at number six.
South Africa, Singapore, Saudi Arabia, and the Cayman Islands complete the top 10 relocation choices for British citizens.
As European nations consider following Spain's lead with restrictive property taxes, these alternative destinations may see increased interest from British buyers seeking overseas homes.
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