The Balearic Islands want to restrict the purchase of homes by foreigners
Can the sale of homes to foreigners be limited? The debate is on the table in the Balearic Islands, the community with the most expensive square meter in Spain, where the price of houses and the signing of mortgages have risen the most and on the podium of sky-high rents. The European Union makes it very clear that this measure would be illegal, but in the archipelago the tripartite government - made up of PSOE, Podemos and the nationalists of Més - wants to find the seams in the regulations in order to stop the escalation of prices that frequently involves the sale housing to foreigners, both in luxury houses and in those of medium and even low level.
approved a motion presented by Més per Menorca, by which the Balearic Executive undertakes to study for three months the limitation on the purchase of real estate by foreigners. “The Government of Spain and the Autonomous Government are urged to set up a working group to study the real impact that these operations have on housing prices, and the legal possibility that some type of limitation or condition can be established. », details Eduardo Robsy, general director of the Balearic Ministry of Housing.
In the Balearic Islands, one of every three purchases in the Balearic Islands is made by foreign citizens, mainly from the United Kingdom, Germany and France. Twenty years ago they were focused exclusively on luxury housing but now they are buying apartments and mid-level houses, which are becoming unaffordable for residents because prices have skyrocketed. "This is when we begin to have the problem," says the president of the College of Real Estate Agents of the Balearic Islands and the API Balearic Association, Natalia Bueno, who does not see the proposal to limit the purchase of homes to foreigners as "crazy" in the islands.
He criticizes that the State is the first to sell its properties "to the highest bidder" and does not start the self-limitation by itself. Natalia recently went with a client to a public real estate auction. Before she entered, a German warned her that she was going to keep everything. Sure enough, she bid above market prices and took it. "She even stayed in a flat in Son Gotleu, the worst neighborhood in Palma, paying an exorbitant amount," she says, surprised. Her client, a Majorcan who was opting for a first home, and other residents of the Islands were left without possibilities.
“When there is a rise in
real estate prices in a specific segment of the market, for example luxury, this effect drags the rest of the market and also raises prices in the middle sector”, says Robsy. This effect, added to the high demographic pressure and the limitation of the land of the Islands, among other factors, is stressing the market to the point that more and more people need a place to live, prices are more inaccessible while the park of housing does not grow at the same rate.
The Executive led by the socialist Francina Armengol is aware that it has no direct competence to establish limitations in this regard and that they even "exceed the decision-making sphere of the Government of Spain." In the case of EU citizens, "some type of restriction could be established but the European Commission would have to authorize it," advances Robsy, who sees it as more feasible to apply it to non-EU citizens, as is the case of the British, taking advantage of the fact that the United Kingdom is not part of the EU and that the Balearic Islands have a lot of residential tourism from this country. «Perhaps some limitation could be established, but this is an area that corresponds to the foreign policy of Spain and the exclusive competence belongs to the State Government. Hence the interest in jointly exploring the magnitude of the situation in the Balearic Islands and the solutions”.
For Més per Mallorca, the important thing about this Wednesday's motion is that it asks that the Government of Spain also sit down because they consider "that it has the competence framework to carry out this measure", explains the deputy of Més per Mallorca Josep Ferrà, who acknowledges that he does not know if the Executive of Pedro Sánchez is for the job but warns that if he does not agree to sit down, it will be the Balearic government that takes measures "unilaterally". Robsy clarifies: "When the motion speaks that if the State does not participate, it will be done unilaterally, it refers to that study, not to the application of a regulation directly because we know that we are not competent in that sense."
Més per Mallorca proposes to remove all purchase incentives for foreigners and points directly to the Golden Visa, a regulation approved by the PP in 2013 that "rewards" foreigners who acquire a house in Spain for a value of more of
€500,000 and that it can encourage the residence in Spain of people with capital of dubious origin.
"In 2021, more than 1,000 Russians [en toda España] they took advantage of this measure that, in addition to increasing the welfare pressure, is classist", denounces Josep Ferrà, who argues that in the 90s foreign capital was limited to buying luxury houses as "possessions and high standing chalets" but today the buying and selling fever has reached the homes and flats of the middle class, aggravating an already existing problem.