The Spanish Government has decided to end the Golden Visa program in Spain, initially introduced following the 2008 financial crisis to attract foreign investment.
Spain’s Prime Minister, Pedro Sanchez, declared on Monday the cessation of the nation’s “golden visa” program, which provides residency rights to foreigners making significant investments in Spanish real estate. Sanchez emphasized that terminating the initiative would facilitate the transformation of affordable housing from a speculative venture into a fundamental right. Under the program, non-EU citizens investing a minimum of 500,000 euros ($541,250) in Spanish real estate without resorting to a mortgage are granted a special permit enabling them to reside and work in the country for three years. Will this be the End of Golden Visas in Spain?
Sanchez revealed that the government would initiate the process of abolishing the program during Tuesday’s weekly cabinet meeting, following a review of a report submitted by the Housing Ministry. Government statistics indicate that since the inception of the golden visa scheme in 2013 until November 2022, Spain has issued nearly 5,000 permits. The majority of visas, approximately 94%, are associated with real estate investments, primarily concentrated in major cities grappling with a strained housing market.
Chinese investors dominate the list of beneficiaries, trailed by Russians who have injected over 3.4 billion euros into the Spanish real estate market. However, concerns have been raised regarding the origin of these funds, as highlighted in a 2023 Transparency International report. Despite the prominence of the program, its impact on the property market appears minimal, accounting for less than 0.1% of the 4.5 million homes sold during the specified period, according to Idealista, a property website.
Francisco Inareta, a spokesperson for Idealista, contends that Spain’s housing predicament stems from supply shortages and heightened demand rather than the golden visa scheme. Inareta criticizes the government’s focus on international buyers instead of fostering new housing development as a misguided approach.
Spain’s decision mirrors recent actions taken by neighboring Portugal, which revised its own golden visa program to exclude real estate investment in response to a housing crisis. The European Commission has long advocated for the discontinuation of such schemes, citing security concerns.
The golden visa, initially introduced in Spain following the 2008 financial crisis to attract foreign investment, allowed residency through various means, including purchasing real estate exceeding 500,000 euros. While popular, critics argue that the program has contributed to escalating property prices in cities like Madrid and Barcelona. Terminating the golden visa program aligns with Sanchez’s vision to prioritize housing as a fundamental right while addressing market imbalances exacerbated by speculative investments.
Stay tuned for more information on the end of Golden Visas in Spain and how it will affect current holders, please do not hesitate to reach out if you have any questions or concerns.
