Following previous calls from different politicians for the abolition of golden visas, Spanish Prime Minister Pedro Sánchez announced on Tuesday, 9 April, that the government has started the process of eliminating the scheme.
Until now, foreigners buying property worth €500,000 or more have been awarded with a residency permit. The scheme also gave visas to people who invested at least €2 million in Spain’s sovereign debt, invested or deposited at least €1 million in a Spanish company or bank or generated jobs, scientific or technical innovation, and/or had a significant positive social impact.
However, from all the options, purchasing real estate has been by far the most popular, with only 6% of the golden visas awarded being through one of the other means. “Today, 94 out of every 100 such visas are linked to real estate investment… in major cities that are facing a highly stressed market and where it’s almost impossible to find decent housing for those who already live, work and pay their taxes there”, Sánchez said.
In the 10 years since the scheme was introduced in 2013, a total of 6,200 Spanish golden visas were issued for property investment, according to Transparency International. Chinese and Russians received the most residency permits, with 2,712 and 1,159, respectively. They were followed, in much smaller numbers, by Iranians (203) and citizens of the US (179) and the UK (177).
Although Sánchez hopes that scrapping golden visas will “guarantee that housing is a right and not merely the subject of business speculation”, others have expressed doubts over its actual impact on real estate. Over the past decade, not even 0.1% of Spain’s 4.5 million homes were sold to foreigners looking to gain a visa, according to property website Idealista.
“The measure announced today, which focuses on international buyers rather than encouraging new homes to come onto the market, is yet another misdiagnosis”, said Idealista’s Francisco Iñareta. “The problem with housing in Spain, both in terms of sales and rental, is not caused by the Golden Visa, but rather by the increasing lack of supply and the accelerating growth in demand.”
How the move will impact the real estate market in Spain remains to be seen, but Spain is just the latest European country to put an end to the scheme following call for abolition from the European Commission, especially concerning Russians after the start of the war in Ukraine.
The Netherlands scrapped the scheme as of this year, while Ireland already axed it in 2023. Italy stopped issuing the visas for Russians and Belarussians. Greece has raised the price for property investment, while Portugal has eliminated the real estate option altogether.
