Buying property in Spain is making less and less sense

Spanish bricks are no longer a safe haven: they are a mortgage with the taxman

A friend has just received the notice: the town council newly run by the PP (Spain's conservative party) is raising his IBI (local property tax) by 220 euros to finish a PAI (urban development plan) that, according to him, the PSOE left gutted. The anecdote sums up what is souring the relationship between small savers and housing: charges that change with every government, public projects paid for out of the neighbour's pocket, and a feeling that bricks tie you down more than they protect you.

For years, rock-bottom interest rates pushed many savers into buying to let. The business did not work through rental income, but through capital gains. That scenario has run its course. Prices are high, future appreciation looks limited and, on top of that, there is direct intervention in the market: a 2% cap on rent increases until the end of 2027. A safe bet: the cap will be extended.

Meanwhile, taxation keeps tightening the screws. There are municipalities where the taxes on owning a home exceed 1,000 euros a year, with increases of up to 20% in a single year. A few, the minority, have managed to avoid paying IBI. The difference lies in knowing where to look, but also in sheer arbitrariness.

The way out? Some are starting to look towards Northern Europe, while admitting that there too they are squeezed by their respective states. Expatriation is not a universal solution: in the West, governments are up to their eyebrows in debt and chase every last cent.

The awkward question is another one: if property no longer guarantees returns, liquidity or protection from rule changes, what is left of the old saying that "investing in bricks is the only thing that never fails"? In Spain, perhaps just a memory.