Foreigners, and in particular non-resident non-EU nationals, tend to concentrate in Spain’s beautiful coastal areas, Balearic and Canary Islands. These foreigners do not normally buy property in large Spanish cities such as Madrid, Barcelona, Valencia and Malaga with the notable exception of South American immigrants because of their cultural and linguistic affinity.
As a result of where these foreigners like to settle down, thousands of local businesses (private schools, real estate agencies, international supermarkets, interior and home decoration, restaurants, etc) may find themselves in dire straits after this announcement. All these people, all these companies, are heavily reliant on non-EU’s to conduct their daily business. The lion’s share, with a great difference, are British nationals who would be gravely affected by the new tax proposal. British nationals account for almost 20% of Spain’s Tourism, giving them de facto great leverage.
Make no mistake, this policy would also impact tourism, as some people may take to boycott the country. Tourism accounts directly for 12% of Spain’s GDP, and a further 6% indirectly. In plain English, Tourism moves one-fifth of Spain’s economy.
Moreover, property owners who are heavily dependent on foreigners to sell their high-end properties (as their price range is well out of reach of Spanish nationals) may be forced to a sharp drop in sale prices as their pool of prospective international buyers would dry up overnight, at least until the dust settles.
All these companies that dot Spain’s coastlines, which heavily rely on non-EUs, may face the hardship of this foolish decision jeopardising their financial viability. The livelihood of thousands of people is at stake.
