New measures could push Brits toward Cyprus
Spain’s decision to impose steep taxes on non-EU property investors using platforms like Airbnb has sparked debate over whether countries like Cyprus and Greece will benefit from the shift in demand.
Announced on Tuesday, Spain’s plans to discourage foreigners from buying homes involve increasing taxes by up to 100 per cent on properties purchased by non-EU citizens who do not live in an EU country.
Other suggested changes include higher taxes on holiday rentals, tax breaks and support for landlords offering affordable housing, and legal reforms to speed up construction and increase land available for private building.
Spanish prime minister Pedro Sanchez pointed out that non-EU residents purchased 27,000 properties in Spain in 2023, “not to live in” but “to make money from”. However, he has not yet provided a timeline or detailed plans for implementing this tax.
Speaking to the Cyprus Mail, Pavlos Loizou, CEO of real estate analytics firm Ask Wire, questioned whether these measures will actually be enacted and, if so, how thorough their implementation will be.
“Will it actually pass and how well will they be able to enforce this?” Loizou asked.
Indeed, opponents of the Spanish prime minister criticised the proposed measures, calling them “xenophobic,” and vowed not to enforce the measure in regions under their control.
“The problem is not that people want to live in Spain, the problem is that there is a lack of housing,” said Luis de la Matta, director of communications of the People’s Party (PP).
“We are not going to facilitate a xenophobic measure,” he added.
Moreover, Loizou explained that while some investors may indeed be funnelled to other countries, including Cyprus, he doesn’t expect the number to be substantial.
“Yes, some prospective property buyers may come to Cyprus or Greece but it will not change things dramatically,” he said.
He also suggested that in terms of Cyprus’ short-term rental sector, the horse has already bolted out of the gate.
“There have already been many investments in this sector, so I don’t expect any new investors to change the landscape in great fashion,” he said.
“Yes, there may be some impact, but it will be negligible,” he added.

He also mentioned that Greece, one of the countries where investors may turn to, has also introduced strict regulations to control short-term rentals, aiming to address rising rents and housing shortages.
In Greece, properties like renovated warehouses and non-primary residences are now ineligible for listing on platforms like Airbnb.
In addition, eligible rentals face stricter requirements, including better lighting, ventilation, and sanitation, with hefty fines for violations.
Moreover, a year-long suspension on new Airbnb licences has been enforced in central Athens, while a climate resilience fee now applies to short-term rentals, funding local infrastructure improvements strained by tourism.
“Only Cyprus has not yet done much to better regulate the short-term rental market,” Loizou said.
“Yes, they have launched a registry of short-term rental properties but it is not well-maintained, with approximately 60 per cent of such properties not being on it,” he added.
Meanwhile, Toby Leek, president of property professionals’ body NAEA Propertymark, told the Daily Mail that “many Brits may take the news of heightened property taxes in Spain as a blow considering moving to such a location could well have been a lifelong ambition”.
“Many Brits will likely be put off by this extreme hike in property taxes and will be looking to other countries such as Cyprus and Greece with lower property tax levels for their dream home move,” he added.
In the same article, Stephen Abletshauser, private client partner at Spencer West LLP, said that this move by the Spanish government “may well prove to be a long-term own goal“.
“The likes of Turkey, Italy, Malta, Cyprus and even France will welcome this decision in a fiercely competitive market for wealthy non-residents retiring in the sunshine,” he added.
While it is true that some investors may indeed turn to Cyprus for properties, it remains to be seen how substantial this number will be.
“Some buyers will keep their money instead of investing, while others will find alternative investment vehicles,” Loizou said.
“It doesn’t mean that all of the people who were interested in purchasing properties in Spain for the purpose of renting them out will necessarily come to Cyprus or Greece,” he concluded.
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