...per year. What I wrote was, "5% of properties EVERY YEAR adds up VERY quickly to a huge percentage of properties being owned by foreigners in a decade."
Foreign buyers are making long term rental property investments. Local buyers are buying to live there. On average locals buy and sell when jobs or life situations change. Over time the total percentage of foreign owned homes becomes a larger percentage. This is happening in places like London already.
With 5% of home sales to foreigners in one year, it looks like Spain could become Chelsea on steroids. It looks like Spain has come to the same conclusion and is looking to proactively protect their domestic real estate market.
"A 100% tax on foreigners will do nothing but harm the small villages attempting to attract outside investments in order to save their aging-out communities."
That is one way of looking at it. Another way is that Spain wants to avoid what has already happened all over the world, that the locals end up being priced out of their own neighborhoods. The solution becomes a bigger problem than the original issue.
Alternative solutions exist. For example, in Sardinia, you can buy a home in a village for €1 and get a credit for €30.000 to renovate from the government. The catch is that you have to move there and make it your legal permanent residence.
