Pedro Sánchez Unveils Bold Housing Reforms To Tackle Spain's Property Crisis

This is what Pedro Sánchez said on 13th January 2025 at the Museo del Ferrocarril in Madrid at the forum Vivienda, quinto pilar del Estado del bienestar (Housing: the fifth pillar of the welfare state).

The conference lasted more than 3 hours and we listened carefully to bring you information on all 12 measures that the government is planning to implement to support families and workers living in Spain, while experiencing extremely high house prices, not only to buy but also to rent.

But are these measures feasible and effective enough? What percentage were 27 thousand houses of the total market in 2023? 

Let's see all the facts and details and put this intro into perspective. Maybe it's just a polemic, hard to expect some tangible results for ordinary people. 

The Spanish government is introducing a set of 12 measures to tackle the housing crisis and make sure everyone has a fair chance of getting a home. 

These measures will affect different parts of the housing market. For example, they will make it more expensive for people from other countries to buy property. 

The government will also be building more public housing and helping people to pay rent. They will also be cracking down on short-term rental platforms like Airbnb and making it harder for people to buy property just to rent it out.

They are based on what has worked in countries like Denmark and Canada. The aim is to ease the current housing emergency and make the housing market more stable and affordable for citizens.

The government has given over 3,300 homes and 2 million square metres of land to a new Public Housing Company. 

This company will build thousands of low-cost rental homes to make sure that they stay in public ownership, that they are not sold on to make a profit, and that there are enough homes for people in the future.

Legislation will guarantee that social housing remains in public hands indefinitely. This ensures that homes built with taxpayers' money remain affordable and are not sold to private investors or funds.

Six billion euros of public funding will support the construction of 25,000 affordable homes for rent through public-private partnerships. This will directly increase the supply of affordable housing to ease pressure on the rental market.

The strategic project PERTE, based in Valencia, will introduce industrialised and modular construction methods. This will make it possible to build houses faster and cheaper, reducing costs and providing affordable housing more efficiently.

A new system of public guarantees will reduce risks for landlords and tenants in the affordable rental sector. It will encourage property owners to rent at lower prices, starting with landlords who rent to young people under 35.

Financial support will encourage landlords to renovate empty properties and let them at affordable rents for at least five years. This will bring unused homes back into the market and increase affordable rental options.

Landlords who rent their properties at regulated prices are exempt from income tax on rental income. This provides a financial incentive for landlords to keep rents affordable.

New tax measures will ensure that tourist rentals are treated as businesses, with stricter oversight to prevent fraud. This will reduce the number of homes taken out of the long-term rental market for short-term tourist use.

SOCIMIs (real estate investment trusts) will only receive tax benefits if they focus on affordable rental housing. This reform targets speculative investment and redirects resources to affordable housing projects.

Non-EU buyers will be taxed up to 100% of the value of the property. This measure discourages foreign investors from driving up property prices and ensures that housing remains accessible to local residents.

The government will expand existing support programmes and introduce new ones targeting vulnerable groups, youth and the elderly. These programmes will help more people to afford housing, especially in deprived areas.

Eviction protection will continue until 2028, providing stability for tenants and homeowners at risk of losing their homes. 

This will provide a safety net for the most vulnerable and reduce homelessness and social displacement.

By addressing supply, affordability and speculative practices, these measures aim to create a fairer housing market that meets the needs of residents and reduces financial stress caused by high property prices.

As residents and especially as a family with 2 children, we are interested in a cooling down of the property market so that we can rent a bigger property that meets our needs. 

At the moment you can rent something on the Costa Del Sol for double the price of 5 years ago.

According to INE - The National Statistics Institute of Spain, there were a total of 583,651 house sales in 2023. So basically 27 thousand properties sold to non-residents is only 4.62%!

Could this help to bring prices down? Maybe only the 100% tax measures on the property value won't', but we need to look at the long term plan, a combination of building new homes, reducing the number of speculators and giving benefits to homeowners providing better conditions!

We strongly believe that the public banks should also be involved and urged to help the working people by offering exceptional conditions. At the end of the day, the only people who benefit from such credit lines are the builders and project developers, who make 10-20-30 or even more percent profit just because they have access to easy money. 

Some AirBnb owners are ripping off poor tourists by offering really bad conditions, and this should also stop. Hiding income is not an option if you want a sustainable business and thriving economy, and the government is on the right track! 

Also, the capsule sleeping places in Barcelona, called hostels, which are huge apartments with 20+ beds, are just a terrible solution for a normal person. 

It is clear that changes are needed not only in Spain, but also in other European countries such as Germany, France, the Netherlands and many others. The demographic situation looks worse against the background of a lack of affordable housing. The balloon could burst at any time, sooner or later!