Spain could soon be looking to scrap its so-called “golden visa” programme, following a sweeping European Parliament vote against the practice of buying EU citizenship and amid questions from various Spanish politicians over the ethics and value of the scheme.
How it works
Different countries apply different rules to their golden visas. In Spain, currently, investors can be eligible for citizenship if they:
- purchase property worth at least half a million euros (one or more properties are permitted as long as they meet or exceed the €500,000 purchase price);
- invest at least two million euros in Spain’s sovereign debt;
- invest or deposit at least one million euros in a Spanish bank or company; or
- generate jobs, scientific or technical innovation, and/or have a significant positive social impact.
However, questions are now being raised in Spain about the effects of golden visa schemes, with centre left party Más País leading a push to end the privilege this year. Party leader Iñigo Errejon, commenting on a bill to end the privilege in spring 2023, declared, “Spanish citizenship cannot be bought” adding that the scheme does not create significant employment and instead works against locals by driving up house prices.
Upping the ante
Now the coalition government partner Sumar has also expressed support for reviewing the practice and local media are speculating that the real estate pathway could be amended to require purchase of a million euro property portfolio to reflect rising property prices.
A director at wealth management firm Blevins Franks, Jason Porter, said real estate is “the preferred golden visa investment by far”, putting this down to the efficiency of making an investment and covering off somewhere to live at the same time. However, he agreed that “there is an argument to say it distorts the local market”. He pointed out that “pushing up the minimum investment to €1m might move any real estate market distortion to just another albeit higher pinch-point.”
End of the gravy train?
Spain is not alone in reconsidering its relationship with wealthy foreign incomers. The UK ended its golden visa scheme in February 2022 amid outrage over Russian investors and the invasion of Ukraine. A year later Ireland ended its programme.
Portugal has also terminated the property investment aspect of its scheme, though it has seen a last-minute rush after announcing the changes. Albania has put its own golden visa plans on pause, after the EU warned it would be in breach of various EU standards around security, dirty money and organised crime, and terrorism funding. And the Netherlands has announced the termination of its programme.
Greece, Italy and Malta still offer programmes at various levels of investment.