Plans to limit foreign property buyers in Spain’s Balearics…
Plans to limit foreign property buyers in Spain’s Balearics could make it more difficult to buy a holiday home on the Islands
The Balearic Islands government is proposing limits on the number of properties that can be bought by non-resident foreigners on the popular islands of Mallorca, Menorca, Ibiza and Formentera.
In the regional parliament on Wednesday, Minister for Labour, Tourism and Industry Iago Negueruela pushed the motion, calling for a “deep debate” on how to limit the purchase of homes on the Balearic Islands to non-residents and people who have been living in the archipelago for less than five years.
The Balearics, long a holiday getaway for wealthy Northern Europeans, has seen a boom in the number of second homes bought by non-resident foreigners in recent years.
The regional parliament has approved a motion to introduce limits, part of a broader initiative to curb overpopulation and property saturation on the islands.
It is yet to outline a concrete policy on how exactly these property purchase limits would be enforced by law.
In the two decades from 2000-2020, the islands’ population total has grown by 50 percent – rising from 823,000 to 1,223,000 inhabitants.
Around a third (32.67%) of property purchases in the Balearics are made by foreigners, and of those 57..5% are residents, while the remaining 42.6% are non-residents.
This growth has placed great stress on the housing sector, and the boom in foreigners looking to buy property on the island in recent years has made housing far less accessible for locals.
The Balearic government has pointed to examples of similar housing protections around Europe – in particular Finland, Denmark and Malta – that limit the number of properties sold to non-residents to help regulate the market and protect the purchasing power of local residents.
The proposals have met some opposition, however. The Balearics, which generates 35% of its GDP from tourism, according to figures from Caixa Bank, has long been a holiday or second-home hub for wealthy foreigners.
On this point, right-wing Popular Party member Sebastià Sagreras suggested in the regional parliament that conflating the foreign-buyer property market with local shortages is unhelpful, adding that the properties bought by foreigners, often worth more than a million euros, “do not compete” with those that cost €200,000 or €250,000 and are largely bought or rented by national residents.
Unsurprisingly, estate agents are opposed to the proposed changes as well. The real estate market makes up a sizeable proportion of the Balearic’s GDP, and they argue that interference in the free market would lead to an increase in unemployment and a fall in tax revenue on property transfers, one of the taxes that draws in the most to the public coffers.
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