Property sector in danger? More countries may follow Spain’s tax moves

Following Spain’s recently proposed 100% property tax on non-EU buyers, there have been increasing concerns about other major European countries such as Greece, France and Portugal potentially doing the same. 

New research from relocation specialists at 1st Move International has warned that this scenario could possibly have a major impact on the EU’s property sector, making it especially difficult for UK buyers, among others, to buy second homes abroad. 

In 2024, according to 1st Move International data, Portugal, Spain, France and Germany were some of the most popular destinations for British buyers to relocate to. However, tighter restrictions and soaring costs could potentially lead to other favourable destinations emerging. 

Mike Harvey, managing director at 1st Move International, said in an email note: “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.”

How could a potential 100% property tax impact European economies?

Countries such as France, Greece and Portugal are already dealing with an escalating overtourism problem, which has pushed rental prices up, making it much harder for locals to find affordable housing. 

Spain has also announced that its golden visa programme will be ending on 3 April 2025. Spain’s golden visa programme, otherwise known as the residency by investment programme, allows foreign citizens to legally reside in Spain in exchange for an investment. This investment can be made in property, government bonds or company shares. 

The programme is mainly ending to tackle Spain’s housing crisis, as well as make real estate more affordable for locals. 

Similarly, Greece, Portugal and France are also making moves to handle overtourism, such as cracking down on short-term rentals, focusing more on sustainable tourism practices and promoting less popular and niche tourism destinations. 

However, these countries still rely heavily on tourism, as well as foreign investment, especially in the property sector, to boost their economies. As such, a 100% property tax could have far reaching consequences for economic growth, especially if alternative income generation and investment streams are not developed simultaneously. 

Harvey said: “A 100% tax on foreign buyers could hurt Greece’s competitiveness and economic stability. The country is already tackling housing pressures by banning new short-term rental licenses in key Athens areas. Further changes could reduce investment and affect both the property market and the local economy.

“France’s tourism contributes to around 9% of GDP, with $68.6 billion (€66.4bn) in 2023 tourism revenue – up 110% from 2020. Additional taxes on foreign buyers could strain the market, slowing property investment and tourism.

“Portugal’s tourism contributes to 15% of GDP, reaching €25.1bn in 2023 with a predicted revenue of €66.5bn by 2034. However, with the introduction of new property taxes on foreign buyers, this growth could be at risk. Portugal remains a top destination for Brits, but the introduction of these taxes could dampen that interest, affecting both the property market and the broader economy.”

Where could British buyers move to next?

With popular European destinations for second homes now seeing increased tax and cost uncertainty, several British buyers are looking further abroad to relocate. 

According to 1st Move International, between 2022 and 2024, the US, Australia, UAE, Canada and New Zealand were the top destinations for Brits to move to. Others included Cyprus, South Africa, Singapore, Saudi Arabia and the Cayman Islands. 

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More lucrative career and earnings opportunities, lower taxes, a better quality of life and natural landscapes have been some of the driving factors prompting Brits to move. A lower cost of living and no language barrier in several of these countries has also made them more attractive. 

Harvey pointed out: “Cyprus is becoming an increasingly popular choice for Brits looking to relocate. Our internal data shows it was the 6th 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.”