It has been on the cards for sometime and now it’s official. Spain’s so called ‘Golden Visa’ for property purchases is to end.
Tuesday 9th April following an announcement by President Pedro Sanchez the previous day, the start of procedures to do away with the scheme was on the agenda at the weekly cabinet meeting of his ministers.
“We are going to start the procedure to eliminate the granting of the so-called golden visa , which allows access to the residence regime when more than half a million euros are invested in real estate. We are going to take the necessary measures to guarantee that housing is a right and not a mere speculative business,”
The residency by property investment scheme, offers a 3 year residency permit to foreigners from third countries who purchase a property for €500,000 or more.
The scheme, introduced in 2013 in the fallout of the housing market crash and financial crisis, was seen as a way to invigorate the real estate sector by attracting investment from foreigners, but has not been without criticism. Not least for the lightweight background checks, and being viewed by other EU nations as a back door into the EU for individuals who would otherwise not gain access.
Chinese and Russian buyers are the most represented nationalities over the last 10 years, although this may well have changed since Brexit with the scheme proving popular amongst British buyers and owners of holiday homes in Spain.
In Spain, the scrutiny is more political, with those averse, claiming that it distorts, and has negative socio-economic affects. In his announcement, it is this which Sanchez seems to indicate as the main driver, as he stated that nearly all approved ‘Golden Visas’ and residency permits for property investments were located in regional capitals such as Barcelona, Madrid, Malaga and Valencia, ‘cities where the housing market is stressed’.
Sanchez added “We do not want a speculative investment model with housing”, further commenting on the aim of his main policy to ‘guarantee access to affordable housing . . . and assure that no citizen has to spend more than 30% of their income towards having a suitable, quality home’.
While the overall perception may be one of property investment for a visa to get access to the EU, for many, in particular, Brits and other nationalities that enjoy visa free travel to Spain and the EU, the scheme is the key to spending more time enjoying a lifestyle in Spain and indeed making a permanent move.
In 2023, foreign buyers bought 15% of all homes sold in Spain with British buyers continuing to top the board as the nationality with the largest numbers buyers.
When Ireland, Portugal and Greece got rid of their ‘Golden Visa’ schemes, lack of affordable rental housing stock in its major cities was also cited as a main reason.
Others, including real estate experts have a different view and warn that ending the scheme could be harmful to the Spanish economy as the country will lose foreign investment into the property sector.
Whatever view taken, one thing now seems certain, the countdown has started and it is just a matter of time before Spain’s ‘Golden Visa’ for property investment comes to an end.
Until then, it remains an option for those who have €500k to invest in a property, and anyone looking to do so, needs to act now before it’s too late.
As Spanish visa and residency specialists, we assist people of all nationalities with their property purchases and obtaining their Golden Visa.
