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Spain proposes 100% tax on homes bought by non-EU residents

theguardian.com

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Re: Spain proposes 100% tax on homes bought by non-EU residents

#121

Post by JumpCrisscross »

ajb wrote: post #100
gruez wrote: post #88

Earlier quoted context omitted.

>As far as I know every EU business has to have an eu citizen representative You can't hire a nominee director? >Additionally, a company owned property can't just be used privately. They can't "rent" it back to the owner?

That sort of thing is a bit risky. One company I followed was bought out by a US vehicle owned by a Chinese investor, and then everything ground to a halt because (it appears[1]) the local agent fraudulently changed the bank accounts into their own name and locked out the owner. Operating stuff in a foreign legal jurisdiction is hard. [1] this seems to have been the judgement of the court, but not all the fillings ar…

> the local agent fraudulently changed the bank accounts into their own name and locked out the owner

This sounds like a front more than a nominee. A front legally owns the company and has a side deal with someone conferring control. It's pretty much straight-up fraud. A nominee is similar to a Delaware registered agent; you pay a law firm or whatever a few hundred euro a year to be your glorified P.O. Box

Re: Spain proposes 100% tax on homes bought by non-EU residents

#122

Post by louison11 »

Blaming foreigners for housing prices is misdirected. The real culprit is slow bureaucracy & zoning laws making it impossibly slow to get a permit to build anything in both Spain and Portugal. Both of these countries for example have so many abandoned houses needing to be renovated, and so many foreigners coming in with money to do it - but they can never do it because you can't get a permit in literally forever... I don't know about Spain, but another problem in PT is the building companies too, are unreliable, and typically don't deliver houses in less than 3-5 years if you decide to build new. Increase the supply, and the prices will go down.

Re: Spain proposes 100% tax on homes bought by non-EU residents

#123

Post by iforgot22 »

rvnx wrote: post #6
stavros wrote: post #4

Earlier quoted context omitted.

What's causing it in the US?

In Canada potentially Chinese immigrants in Vancouver/Toronto, in the US it's an over-generous monetary policy (through low interest rates, especially during COVID)

Seems Canada has a similar money-printing MO as the US. CAD money supply doubled in the past decade.

Re: Spain proposes 100% tax on homes bought by non-EU residents

#124

Post by x-complexity »

jedberg wrote: post #44
nozzlegear wrote: post #7

Just tax land value.

How do you calculate the unimproved land value? This is an interesting question with the fires in LA right now. Is the land still as valuable as it was before the house burned down, minus the rebuild cost of the house? Or is the value intrinsically tied to the community that was there but no longer is? Or is the value actually higher now that a developer can come in and remake an entire neighborhood?

> How do you calculate the unimproved land value?

The first thought that immediately came up for me:

- Take the average property value per sqft for each given property

- Multiply it by a fixed percentage

- Take the (your favorite mean / average type) value per sqft and apply that to the empty lot

If that undeveloped land and its surrounding developed areas are controlled by one entity: Recursively expand outwards to factor in the value of the surrounding areas as well.

Compared to the methods outlined by fastball's link [0] later in the article, it's much more weighted towards public valuations & has fewer subjective areas, with the cost being that it can be gamed if certain properties were sold cheaply (but then that's an auditing issue).

No solution would be a silver bullet, but it's 70% silver, and that's good enough to start from.

[0] https://www.gameofrent.com/content/can-land-be-accurately-as...

> This is an interesting question with the fires in LA right now. Is the land still as valuable as it was before the house burned down, minus the rebuild cost of the house? Or is the value intrinsically tied to the community that was there but no longer is?

IMO, the land value is lowered because of the destruction of the properties built on top of it, on top of the rebuilding costs that will come later.

> Or is the value actually higher now that a developer can come in and remake an entire neighborhood?

Not until (a) the land is actually developed, or (b) the market reflects that decision back onto the land values for that area.

Re: Spain proposes 100% tax on homes bought by non-EU residents

#125

Post by nsklab »

hjgjhyuhy wrote: post #108
nsklab wrote: post #67

Earlier quoted context omitted.

For the last years we’ve had 500K immigrants coming every year. That’s what’s causing inflation.

Printing massive amounts of money is what caused the inflation.

I was talking about housing inflation specifically. Housing has increased in price more than the rest of goods plus it’s been increasing in price for a long time, long before covid.

Adding millions of people and not building anything makes housing prices skyrocket. One of the two needs to be dealt with and, since immigration also makes salaries plummet for the most vulnerable, why not kill two birds with one stone.

Re: Spain proposes 100% tax on homes bought by non-EU residents

#126

Post by JumpCrisscross »

rolothrow wrote: post #47
affinepplan wrote: post #3

so is there any actual evidence that foreign home ownership is causing meaningful housing price inflation in Spain? or is this just uninformed pandering like it is in the US

Totally anecdotal, but I live in the largest city in Spain, and even in my residential area (as opposed to the touristy spots) every week I can see ads for "we buy your house, paid upfront over market value, Chinese investors". Posters in walls, flyers in windshields and so on.

> every week I can see ads for "we buy your house, paid upfront over market value, Chinese investors"

It specifically calls out that they're Chinese? Are you sure this isn't a political stunt?

Re: Spain proposes 100% tax on homes bought by non-EU residents

#127

Post by kasey_junk »

Retric wrote: post #46
kasey_junk wrote: post #21

Earlier quoted context omitted.

But you also need to measure the dampening impact on home building. If builders would have built N units knowing they could easily sell some % them to foreign buyers but now they can’t, then you might lose the whole supply. And all the knock on effects for contractors, suppliers, etc

Cities are rarely constrained by the willingness of someone to build housing, it’s generally more an issue of being allowed to build housing.

Cities typically don’t have draconian taxes on real estate.

Re: Spain proposes 100% tax on homes bought by non-EU residents

#128

Post by iforgot22 »

MattGaiser wrote: post #28
affinepplan wrote: post #9

Earlier quoted context omitted.

NIMBYism making it extremely difficult and expensive to build supply as is needed. in 1946 the US had a population of 141M and built 700k housing units in 2024 the US had a population of 336M and built 90k housing units

Your 90K number is a monthly number, not annual and only for single family units. https://fred.stlouisfed.org/series/HOUST1F

It's also a delta being put alongside the absolute US population

Re: Spain proposes 100% tax on homes bought by non-EU residents

#129

Post by WorkerBee28474 »

louison11 wrote: post #122

Blaming foreigners for housing prices is misdirected. The real culprit is slow bureaucracy & zoning laws making it impossibly slow to get a permit to build anything in both Spain and Portugal. Both of these countries for example have so many abandoned houses needing to be renovated, and so many foreigners coming in with money to do it - but they can never do it because you can't get a permit in literally forever... I…

No, that argument assumes you can only blame 1 thing at a time.

Even if the bureaucracy is the worst offender, every foreigner buying a house still results in 1 less house for Spaniards.

Sure, fix bureaucracy, but don't pretend foreign purchases have zero effect.

Re: Spain proposes 100% tax on homes bought by non-EU residents

#130

Post by zdragnar »

matt-p wrote: post #91
CommanderData wrote: post #70

Earlier quoted context omitted.

This is excellent, assets like property don't grow on trees and needs to be protected from foreign investors. Absolutely need something like this in the UK.

I think the ship has sailed, but regardless isn't it all meaningless? Surely they can setup a company to get around it, or will be ban all foreign ownership of shares too?

Land is a public good, insofar as "buying" the land still comes with obligations to the state (paying taxes, conforming to building codes and zoning regulation, etc). Just because you "own" it doesn't actually mean you can do as you please.

Given all of that, it is not unreasonable to limit or outright prohibit foreign ownership of land, or ownership of land by companies which are not majority-locally controlled.

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