A little over a decade ago, Europe's southern governments were competing to sell residency. Spain, Portugal and Greece all offered a deal of elegant simplicity: buy a property, receive the right to stay. By the spring of 2025 that era was formally over. Spain abolished its golden visa outright. Portugal had already severed the property route and would go on to double its citizenship timeline. Greece kept its programme alive but tripled the entry price for the places anyone actually wanted to buy. And in Madrid, a draft bill now proposes a complementary tax of up to 100 per cent on resale purchases by non-EU residents. The direction of travel could hardly be clearer: the drawbridge is rising. What is remarkable is what has not happened — demand has not blinked.
Foreign buyers completed close to 97,300 home purchases in Spain in 2025 — an increase of nearly five per cent on the previous year, even as their share of an expanding overall market eased to 13.8 per cent. In the Balearic Islands, roughly one purchase in three involved a foreign buyer. In the province of Alicante, the figure was over four in ten. The European second-home market in 2026 is therefore defined by a paradox worth understanding properly: the regulatory barriers facing international buyers are higher than at any point in modern memory, and the international appetite for Southern European property is as strong as it has ever been. For anyone weighing a purchase this year, the question is not whether the drawbridge is rising — it is — but how to cross it intelligently. This piece maps the new barriers, separates law from proposal, and explains why the structure of ownership now matters as much as the location.
From Open Door to Drawbridge: A Decade's Reversal
The golden visa era ended not with one decision but with a sequence of them. Portugal moved first, removing real estate from its residency-by-investment programme in October 2023 under the More Housing reform; what survives of the Portuguese programme runs through investment funds, cultural contributions and job creation, not bricks. Spain followed with the cleanest break of all: under Organic Law 1/2025, the investor residence provisions were deleted entirely, effective 3 April 2025, with transition rules only for cases already in process. Greece chose recalibration over abolition — its September 2024 overhaul raised the threshold to €800,000 in Athens, Thessaloniki, Mykonos, Santorini and the larger islands, and banned golden-visa properties from short-term rental platforms outright, with heavy fines and permit revocation for violations.
Portugal then added a second, quieter barrier that has received far less attention than it deserves: the path to citizenship for most foreign residents has been extended from five years to ten. For the cohort of buyers who treated a Portuguese property as the first step in a longer relocation plan, that single change altered the calculus more than any tax could. The cumulative message from three governments is consistent. Europe's southern states still want international visitors, international spending and international owners who use their homes. What they no longer want to sell is the bundle that tied property to passports — and what they increasingly tax or restrict is property treated purely as a yield instrument. The buyer the new regime favours, in other words, is the one who actually shows up.
The 100 Per Cent Question: What Spain's Proposed Surtax Actually Says
No measure has generated more anxious headlines than Spain's proposed surtax on non-EU buyers, so it is worth being precise about what it is and what it is not. The measure — formally a State Complementary Tax on the Transfer of Real Estate to Non-Residents in the European Union — was presented in May 2025 as part of a draft housing bill from the governing socialist parliamentary group. As of mid-2026 it remains exactly that: a draft. It has not been approved by the Congress or the Senate, the government lacks a parliamentary majority, and constitutional lawyers have publicly questioned whether a 100 per cent levy would survive challenge as confiscatory or as a breach of free movement of capital. Nothing has changed at the notary's desk for any buyer completing a purchase today.
The design details matter as much as the headline rate. As drafted, the tax would apply only to second-hand property purchased by non-EU, non-resident buyers — new-build homes bought directly from developers would be exempt, as would EU and EEA citizens and foreigners resident in Spain. How any final text would treat indirect structures, partial interests or shares in entities that hold property is simply not yet defined, and any buyer for whom the question is material should take specific Spanish tax advice rather than rely on commentary. But two strategic observations hold regardless of the bill's fate. First, the political climate that produced it is not going away; proposals of this family will recur across Southern Europe. Second, the smaller the slice of property a buyer acquires, the smaller the absolute exposure to any transaction-based levy — a structural point that favours fractional models over whole-home purchases in a world of rising transfer costs.
The Quiet Squeeze: Rental Licences and the Shrinking Stock of Lettable Homes
While the visa and tax debates dominate the front pages, the measure with the most concrete effect on the second-home market is happening at municipal level: the systematic withdrawal of short-term rental licences. Barcelona has announced that it will not renew tourist apartment licences when they expire in November 2028, a decision upheld by Spain's Constitutional Court in March 2025 that will extinguish more than ten thousand legal holiday lets in a single city — and neighbouring municipalities are following. In the Balearic Islands, where new tourist licences have been effectively frozen across much of the territory for years, fines for unlicensed letting were raised in 2025 to as much as €500,000. The era in which a second home could be casually offset by platform rental income is closing, jurisdiction by jurisdiction.
For the traditional buy-to-let-and-use-it-sometimes model, this is a genuine problem: the financial plan that justified the purchase often assumed rental yield that is no longer legally available. But the licence squeeze cuts in a second direction that is less widely understood. By removing properties from the holiday rental pool, it constrains the supply of quality accommodation in exactly the places demand is strongest — which supports the capital values of well-located homes while making them harder to monetise. The logical response to that combination is a model built on personal use rather than rental dependence. A co-ownership property exists for its owners to live in; its economics never assumed an Airbnb licence. The regulatory wave washing over Barcelona, Palma and the Mediterranean coast leaves that model essentially untouched, a point we examine in our buying FAQs.
What the Numbers Say: Demand Has Not Blinked
Set the barriers against the behaviour and the resilience is striking. Registry data for 2025 show foreign buyers completing nearly 97,300 purchases in Spain, up close to five per cent year on year, with British, German, Dutch, French and Italian buyers leading the table. The geography is even more telling than the volume: the foreign share of purchases reached 32.8 per cent in the Balearics, 29.6 per cent in the Valencian Community and 24.5 per cent in the Canaries, with Alicante province at 43 per cent. These are not the numbers of a market deterred. They are the numbers of a structural demand wave — driven by remote-work flexibility, Northern European demographics and the simple, durable desire for winter sun — colliding with a policy environment determined to channel it rather than welcome it indiscriminately.
That collision has a price effect. When demand holds and the compliant supply of quality homes narrows — fewer rentable properties, fewer new licences, planning regimes that restrict coastal development — values in the prime segments tend to hold or rise even as transaction friction increases. It is the same dynamic we traced in our analysis of the liquidity paradox in Europe's prime second-home market, now reinforced by regulation: the cost of being wrong about a whole-home purchase is rising faster than the cost of the home itself. Layer onto that the post-Brexit reality that British buyers — still the largest foreign cohort in Spain — are themselves non-EU citizens subject to the 90-day Schengen rule, and a clear picture emerges. The rational size of a second-home commitment, for most international buyers, has shrunk.
Crossing the Drawbridge: The Case for Owning Less, Better
Follow the logic of the new regime to its conclusion. Residency can no longer be bought with property, so the visa premium that once justified overpaying has evaporated. Rental income can no longer be assumed, so the yield case for carrying a large, mostly empty asset has weakened. Transfer taxes on foreign buyers may rise, so the capital deployed at the moment of purchase carries more friction risk than before. And the 90-day rule caps how long most non-EU owners can actually be in their homes in any case. Every one of those pressures points the same way: toward owning a share of an excellent property that matches the time you can genuinely use, rather than the whole of a property that sits dark for forty-five weeks a year.
This is precisely the shape of the co-ownership model: typically one-eighth of a fully managed home, owned through a dedicated LLC alongside seven vetted co-owners, with around 44 to 45 days of use per year — comfortably inside Schengen limits, deeded, resellable, and never dependent on a tourist licence. A concrete example from current inventory: a three-bedroom apartment with beach access in Port d'Andratx, on Mallorca's coveted southwest coast, where a one-eighth share is priced at €669,000 — entry to one of the most supply-constrained corners of the most foreign-bought region in Spain, at roughly an eighth of the capital and an eighth of the exposure to whatever Madrid eventually legislates. Buyers drawn to Portugal's post-golden-visa calm will find the same structure across the Portuguese collection, from the Algarve to the Silver Coast.
There is one more advantage that rarely makes the spreadsheets. Regulatory complexity is itself a cost — the hours spent understanding ITP rates, licence regimes, cadastral values and draft bills that may never pass. In a co-ownership structure, the property is acquired, structured and administered by professionals whose business depends on getting that compliance right, and each owner's relationship to the asset is simplified to a share in a clean, single-asset company. The drawbridge era punishes casual, under-advised foreign ownership. It is considerably kinder to buyers who arrive through a structure built for exactly this environment.
A Second Life on the Other Side of the Wall
Strip away the legislative noise and what Europe's new barriers are really doing is sorting buyers. The speculator, the absentee landlord and the passport shopper are being priced and regulated out; the owner who comes for the long lunches in February and the warm sea in October is being left almost entirely alone. That sorting is, quietly, good news for anyone whose ambition was never yield but presence — because the places themselves remain what they always were, and the right-sized way in has never been more clearly defined. A share of a home on the other side of the drawbridge is not a diminished version of the dream. It is the version of it that the 2026 market was built to reward: a second life, taken in weeks you will actually live, in a property that works whether or not a single law in Madrid ever passes.
See what is on the other side. Browse the Spanish collection, explore the full range of current homes, or speak with our team about which shares are available now and how the structure works for non-EU buyers.
