Legal & Tax Advice

A TAX SO DAFT EVEN THE “MINISTRY OF SILLY WALKS” WOULD BLUSH!

INTRODUCTION

Imagine this: the Spanish Government, in a flash of legislative theatre, slaps a 100 % tax on every foreign buyer of second-hand property. No exemptions, no mercy. “That’ll teach them to fall in love with the Costa del Sol!” It’s the kind of idea that sounds like a satirical sketch – because it might as well be one.

THE CONSTITUTIONAL CUSTARD PIE

• Article 14 of the Spanish Constitution guarantees equality before the law. Singling out foreigners is the legal equivalent of throwing a custard pie in that promise’s face.
• Article 31 bans confiscatory taxes. A 100 % levy? That’s not taxation – it’s daylight robbery dressed up as policy. Even the Constitutional Court, known for its poker face, would be hard-pressed not to roll its eyes. And by the way, we all know they wear nothing but fine lingerie under those robes...

THE EUROPEAN DIMENSION – TROUBLE BREWING IN BRUSSELS

• Article 63 of the Treaty on the Functioning of the European Union protects the free movement of capital. Making foreign property twice as expensive is like asking capital to move while wearing cement boots.
• Spain has been called out before by the European Commission for discriminatory tax practices. Think of it less as “Nobody expects the Spanish Inquisition” and more as “Brussels always expects nonsense – and brings paperwork.” And those Brussels bureaucrats know a thing or two about nonsense.

INTERNATIONAL LAW: WHEN FOREIGN INVESTORS CALL THEIR LAWYERS

• Spain’s bilateral investment treaties prohibit indirect expropriation. A 100 % tax feels remarkably close – like expropriation wearing Groucho Marx glasses.
• The likely result? A parade of arbitration claims, legal fees mounting like a Costa Cálida skyline, and diplomats muttering “not again” over their morning cortado.

POLITICAL REALITY CHECK – BACK TO EARTH WITH A THUD

• The governing coalition depends on regional parties that thrive on attracting foreign capital. Suddenly, the brave tax idea starts looking less heroic and more like a political banana peel.
• Expect the measure to be delayed, softened, or quietly buried without ceremony – a fate shared by many flashy proposals once they collide with basic arithmetic and coalition math.

ECONOMIC CONSEQUENCES – SPOILER: EVERYONE LOSES

• On some coasts, foreigners account for up to 30 % of housing demand. If they vanish overnight, so do jobs in construction, real estate, and hospitality.
• The expected tax revenue? Essentially zero. You can’t tax a transaction that never happens.
• And housing affordability? Marginal impact. The real culprits behind rising prices – low supply, zoning restrictions, speculative pressure – get off scot-free, while foreign buyers play the scapegoat.

CONCLUSION

A 100 % tax on foreign buyers is a legal misstep, an economic blunder, and a political boomerang. It might look bold in a press release, but it would collapse faster than a papier-mâché palace in a rainstorm. If it ever sees the light of day, the courts – Spanish, European and arbitral – are likely to dismantle it with the precision of a well-trained legal SWAT team. Even the undersigned lawyer vows to stage a topless protest outside Moncloa, à la Femen – and trust me, nobody wants to see that, especially my wife.

And now for something completely sensible: drop the gimmick. If Spain wants to fix its housing crisis, it needs thoughtful reform – not slapstick policy.