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Governments often try to make the very complex look simple, especially when constructing a narrative around a new piece of legislation, writes columnist Mark Nayler

Mark Nayler

Malaga

Friday, 17 January 2025

Governments often try to make the very complex look simple, especially when constructing a narrative around a new piece of legislation. This week, in revealing his plans to slap a 100% tax on non-EU citizens buying second homes in Spain, Pedro Sánchez offered a perfect example of this technique at work. "The West faces a decisive challenge," he announced, in full save-the-world mode: "To not become a society divided into two classes, the rich landlords and poor tenants."

Those classes already exist, in the UK and most countries throughout Europe; but what about the enormous amount of people who belong to neither? What about, say, moderately well-off (but by no means rich) Brits looking to buy a second home in Spain in which to live for a substantial portion of the year, as a base for economic activity which would benefit the community?

According to Sánchez's bifurcation of the West's entire population into evil capitalists and oppressed serfs, such buyers have to be crammed into the category of "rich landlords". His proposed tax couldn't send a clearer message to this important group: take your money elsewhere, because Spain's full.

But Spain is not full to the members of that large middle group who are German, French or Belgian - respectively the second, third and fourth biggest buyers of second homes in Spain after Brits. Nor to Spaniards based in Madrid, say, who buy a summer home on the Costa del Sol that sits empty for the rest of the year - or, if they're really greedy, is rented out to members of the economic slave class. Around 14% of Spanish households own a second home, the highest such figure in Europe.

There is a wonderful irony in the fact that Sánchez is trying to put off "rich landlords" with a measure that punishes literally everyone else but rich landlords (and Spaniards). Just because a wealthy foreign investor could absorb the extra cost of buying a second home in Spain doesn't mean they would be prepared to. But some will be, perhaps reasoning that they can earn it back through higher rent. Thus, the new tax will increase (or at least not decrease) the number of rich foreign landlords in Spain, while punishing the non-European, non-rich who have no desire to be landlords anyway.

Sánchez has so far failed to say what the money from the new tax would be used for. Perhaps the proceeds could finance the renovation of Spain's four million empty homes. Or maybe the government should just do that anyway. That would go a long way to solving the country's housing problem - unlike the proposed new tax.

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