Last month, Spanish Prime Minister Pedro Sanchez announced plans to impose a 100% tax on homes bought by non-EU citizens to address the country’s housing emergency. Faced with a population angry about housing shortages and Airbnb rentals, Sanchez accuses second-home buyers of buying homes “not to live in or for themselves or their families, but just to make money.”
While many doubt that such a tax hike (or ban) will happen, his claim that non-EU buyers, led by the British and Americans, are speculating on city-center homes is untrue.
Sanchez’s statement comes after a growing number of protests in tourist resorts in western Europe. In Spain, banners read “Your Airbnb was my home”; in Portuguese cities like Lisbon, “Our neighborhoods are none of your business”; and, in the UK’s Lake District, stickers read “F*** your second homes.”
Across Europe, various interventions are being introduced to curb second home ownership – or at least some of its negative impacts.
However, the messages – often complicated by the benefits of tourism and ‘golden visas’ – are mixed. Despite protests and restrictions, buyers are still looking for second homes. And none of the interventions that have been introduced have had the expected results.
Faced with local hostility and rising costs, what are the options for those looking to buy a property in Europe?
Second home ownership has accelerated since the post-war years and the era of low-cost air travel. But this century has seen it reach unprecedented levels.
In 2014, a European Central Bank survey on home ownership revealed that in the EU, 15% of households own a second home. This percentage amounts to over 20% in Finland, Luxembourg, Cyprus, Spain and Estonia.
In the UK, the number of second home owners doubled between 2001 and 2019, according to the Resolution Foundation. Even Brexit – and the 90-day rule, under which British property owners cannot spend more than 90 days out of 180 in the EU – has not dampened the British appetite for a home in Europe.
In 2021-22, 809,000 households in England owned a second home in or outside the UK, a 13% increase on the previous decade, according to the English Housing Survey. 40% of these were outside the UK, a decrease of 44,000 homes over the decade.
The rise of golden visa schemes – largely introduced in 2013-14 – that offer non-EU investors the chance to gain residency permits across Europe has accelerated the trend, particularly in Portugal, Spain and Greece. During 2023, Greece granted the highest number of golden visas in Europe: 7,752, according to the Greek government.
And the post-pandemic rise of digital mobility has breathed new life into second homes. We now have what is politely called a “co-primary”, according to Paddy Dring, global head of first home sales at Knight Frank – a home that is similar in size and quality to the main home, and where time is shared almost equally.
As well as driving up local house prices, seasonal occupancy has led to “cold beds” and “ghost towns” on the one hand. On the other hand, the boundaries are not clear between the purchase of second homes for personal use and rental investments.
Many countries – including Portugal, Greece and, soon, Spain – have since stopped or reduced their golden visa schemes. Even more are raising taxes, a measure long adopted in countries such as Italy and France and due to come into force in England, Scotland and Wales from April.
Welsh councils have already increased council tax on second homes, but this has had a limited impact on the high end of the market.
Cities across Europe – including Paris, Berlin, Rome, Barcelona, Amsterdam, Vienna, Florence and London – have also restricted holiday rentals.
Others have restricted new construction of second homes. In 2012, the Swiss voted in a referendum to ban the construction of new second homes in ski resorts where more than 20 percent were holiday homes, in order to preserve the traditional village atmosphere.
Prices for second homes have risen and developers have responded to new regulations, under which owners must legally rent out their apartments, while also satisfying the growing desire of some buyers to cover the rising costs of owning a second home.
These include managed apartments with shared amenities, often run by hotel chains, which are now found in Alpine ski resorts and southern European cities and coasts. Recent openings include W Residences Algarve, Six Senses Residences in the Swiss resort of Crans-Montana and the Mandarin Oriental in Madrid.
Branded residences in Europe command a 30% premium, according to Savills, and listing the property on a rental basis can be mandatory or optional, while annual management fees can be high – some are as much as £10,000 a year.
The problems caused by second homes need local solutions, not necessarily broad-brush policies like those proposed by Sánchez. Second homes tend to be a problem where housing supply is limited.
