Why France, Portugal, and Spain Tighten Rules on UK Holiday Homes: New Travel Update

Published on January 15, 2025

By: Tuhin Sarkar

Recent developments across Europe signal a significant shift in how countries are addressing the surge of British-owned holiday homes. With housing shortages escalating, particularly in high-demand regions, nations like France, Portugal, Spain, and Greece are enacting measures to curb non-resident property ownership and promote affordable housing for locals.

Spain: Leading the Charge Against Non-Resident Homeownership

Spain has emerged as the most aggressive among EU nations in tackling the influx of foreign property investors, particularly from the UK:

• High Taxation: A proposed 100% tax on properties purchased by non-EU residents, including Brits, aims to discourage speculative buying.
• Affordable Housing Crisis: In 2023 alone, 27,000 properties were reportedly bought by non-residents, sparking frustration among local communities struggling to find affordable homes.
• Policy Reforms: Spain’s measures also include rental incentives and construction reforms to boost housing availability.

The Spanish government cites property speculation as a primary driver of soaring real estate prices, especially in coastal regions popular with British retirees.

Portugal: Protests and Policy Adjustments

Portugal, a favored destination for British expats, is grappling with mounting housing affordability issues:

• Public Outcry: Protests have erupted across cities, with slogans like, “I have to choose between paying for a house or eating,” highlighting the dire housing situation.
• Housing Reforms: Authorities are considering tighter restrictions on foreign ownership to prioritize local residents.

France: Regulating Short-Term Rentals

France has taken a different approach by targeting short-term rental markets, particularly in tourist-heavy areas:

• Tourist Rentals Boom: The number of short-term rentals skyrocketed from 300,000 in 2016 to 1.2 million in 2024.
• New Regulations: The government has introduced stricter licensing and oversight to reduce the impact of rental markets on housing availability for locals.

Greece: Ban on Short-Term Licenses in Key Districts

Greece has faced rising tensions over the influence of tourism on local housing:

• Short-Term Rental Ban: In response to protests, Greece banned short-term rental licenses in three central Athens districts.
• Tourism’s Double-Edged Sword: Despite welcoming over 32 million visitors in 2023, the government is under pressure to balance tourism’s economic benefits with its impact on housing.
• Protests in Athens: Demonstrators criticized foreign property owners and short-term rentals, accusing them of displacing local families.

The British Perspective: Uncertainty in the EU Property Market

For decades, British buyers have flocked to European destinations, drawn by the promise of affordable luxury homes in sunny locales. However, the evolving landscape presents new challenges:

• Increased Costs: Higher taxes and stricter regulations are making it less appealing for Brits to invest in holiday properties.
• Cultural Backlash: Local resentment towards non-resident homeowners is growing, with many blaming foreign investment for exacerbating housing crises.

Economic and Tourism Impacts

These regulatory changes are likely to reshape the relationship between tourism and real estate in Europe:

• Positive Outcomes:
  • More affordable housing for locals.
  • Incentives to develop long-term rental markets.
• Challenges:
  • Potential decline in foreign investment.
  • Reduced tourism revenue in some areas heavily reliant on non-resident homeowners.

Future of British Holiday Homes in Europe

The EU’s tightening of housing regulations signals a broader trend of prioritizing local needs over foreign investments:

1. Shifting Priorities: Governments are balancing economic gains from tourism with addressing pressing housing shortages.
2. Regional Variations: While Spain is leading with aggressive taxation, countries like Portugal and Greece are focusing on rental markets.
3. Adaptation Required: British buyers may need to reassess their investment strategies, focusing on compliance with new rules.

The measures taken by France, Portugal, Spain, and Greece to address housing challenges reflect a growing emphasis on sustainable tourism and housing equity. For British buyers, these changes mark a turning point in the European property market, demanding a closer evaluation of costs and benefits before investing in a holiday home abroad.

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