Spain joins Portugal and Ireland in ‘Golden Visa’ scheme

Wednesday, April 10, 2024

According to official statistics, Spain granted nearly 5,000 golden visa permits between the inception of the program and November 2022.

Spain announced that it intends to abolish its ‘golden visa‘ initiative, which provides residency privileges to non-European Union property purchasers, as part of Madrid’s efforts to enhance the availability of affordable housing for its citizens.

Spain’s Prime Minister Pedro Sanchez said today that his administration will initiate the initial measures this week to abolish the scheme.

Introduced in 2013, golden visas have allowed non-EU nationals who invested a minimum of €500,000 ($543,000) in real estate to secure residency and employment rights in Spain for a period of three years.

According to Sanchez, ending the initiative would assist in transforming access to affordable housing into a fundamental right rather than a speculative business.

Prime Minister said: “Today, 94 out of every 100 such visas are tied to real estate investment… in major cities that are experiencing a highly strained market and where it is nearly impossible to find suitable housing for those who are already residing, working, and contributing taxes there.”

According to official statistics, Spain granted nearly 5,000 golden visa permits between the inception of the program and November 2022.

As per a report from Transparency International in 2023, Chinese investors claimed the highest number of permits, with Russians following closely behind and contributing over €3.4 billion in investments.

Advocates for the elimination of the golden visa program have been emphasizing that it led to a significant increase in housing costs.

Several economists, nonetheless, have highlighted that the housing issue in Spain was not a result of the golden visa program, but rather stemmed from a shortage in supply and a sudden surge in demand, with real estate website Idealista criticizing the measure, and calling it another misdiagnosis as it targets international buyers instead of promoting the construction of new homes.

Spain joins Portugal, and Ireland, that have also recently decided to abolish golden visas, with Spain being the latest EU country to do so.

The purpose of these programs in each country was to encourage foreign investment in order to help recover from financial downturns caused by real estate market crashes.

The European Commission (EC) has consistently advocated for the termination of such initiatives, highlighting both the security hazards and apprehensions regarding potential corruption, money laundering, and tax evasion.

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