Let's take a look at why Spain has abolished the Spanish Golden Visa
Spain’s Golden Visa programme, which
was renowned for being one of the most successful granters of residency by
investment in Europe, has just been abolished.
The Spanish government has made an official announcement, in recent days,
explaining that the reason they have made the decision to end their Golden
Visa Programme is due to property speculation and to help ensure housing is
being used for the right reasons, and not just for business.
Table of contents:
A brief overview of the Spanish Golden Visa programme
The Spanish Housing Minister, Isabel Rodríguez, has revealed that since
launching the Golden Visa programme in 2013, Spain has granted over 14,500
“golden visas”, which were all linked to investments in real estate, that
mainly benefited non-Spanish citizens. Including citizens from the UK,
US, Iran, China and Mexico.
The reason for the sudden abolishment may be due to the number of
applications that have been made over the last two years, which has
accelerated dramatically. In 2022, Spain approved just over 2,000 visas and
approved 3,273 visas in 2023. Despite trying to save the Golden Visa
programme, by planning to increase the minimum investment requirement to €1
million, a sudden increase in applications at the start of 2024 has seen
Spain put an end to the Golden Visa scheme altogether.
The 'Golden Visa’ and the Spanish property market
For those of you who don’t know, the
Spanish Golden Visa programme
allowed non-EU citizens to obtain Spanish residency by investing at least
€500,000 into local real estate. This resulted in house prices rising to be
unaffordable for local residents, especially those in the younger
generations, who would have historically been first-time buyers.
The cities with the highest housing prices include Madrid, Barcelona,
Alicante
and
Valencia, which has been a direct result of visas being granted in these locations.
According to Spain’s Prime Minister, Pedro Sánchez, in the cities with
highly stressed housing markets, like Madrid and Barcelona, it’s almost
impossible for locals to find affordable places to live. Adding that as of
this week, the Spanish government will take the first steps toward
abolishing the Golden Visa altogether. Having sparked questions around
investment in housing and the inequality it’s caused, Pedro Sánchez has
decided the Golden Visa programme no longer serves the values Spain holds.
The Spanish Golden Visa: Political Debate
The recent decision to end the Spanish Golden Visa programme was triggered
by an increase in Spanish citizens being forced to move out of their
neighbourhoods amidst surging house prices. This division between those who
can afford the real estate, and those who no longer can, has seen the Golden
Visa programme deemed politically toxic. The criticism has created divisions
within the Spanish government, leading to the decision to end the programme
in the coming weeks.
Spain has seen a rise in the number of young adults choosing to live with
their parents, as opposed to moving into their own property. In 2023, the
average age that young adults leave their parents rose to 30, which is four
years older than the E.U average (according to the OECD).
Along with the internal pressure to put an end to the Golden Visa programme,
Spain has also faced external pressure. Portugal, Greece and other countries
in the E.U. have already put an end to their Golden Visa schemes, or made
changes to make them less detrimental to the lives of their citizens. E.U.
officials have also made it clear that they disapprove of such programmes
and have stressed the importance of all countries ending their Golden Visa
programmes due to the potential security risks they pose. Similarly, the
schemes make countries vulnerable to corruption, money laundering and tax
evasion.
The Spanish Golden Visa: Ethical Debate
The Brussels E.U. headquarters have criticised the Spanish Golden Visa
programme, saying that the initiative allows wealthy foreigners to simply
‘buy’ the right to residency in Spain. In some cases, without even living in
the country. Such activity encourages money laundering, terrorist financing,
corruption and poses a risk to Spain in general - which is all incompatible
with E.U. standards.
In a study reported on by the Financial Times in 2023, they revealed that
since 2013 Spain had granted more than 1,000 visas to Russian citizens and
over 2,700 visas to Chinese citizens. Although this achieved the initial
goal of attracting foreign investment to help Spain recover from financial
trouble, with Russians investing a total of €3.4billion. The resulting
inflation and security issues have raised concerns across Europe about the
security and ethics of the Golden Visa programme and left E.U. members
questioning whether Spanish authorities ever investigated the source of the
funds.
What does this mean for British expats?
Spain is a very popular destination for British people looking to relocate,
with sources recording over 280,000 British expats residing there as of
2023. Historically, the Spanish Golden Visa programme allowed British expats
to bypass traditional E.U. stay limits, whereas expats will now have to
apply for Spanish residency or visa 90 days after their arrival.
Professionals have highlighted the issues expats will now face if they wish
to move to Spain, with some even criticising the decision to abolish the
Golden Visa as they attribute the rise in housing costs to an increase in
demand for Spanish real estate, and a lack of supply. They use Portugal as
an example, as they have recently made changes to their own Golden Visa
scheme, by excluding the option to invest in real estate, but allowing
expats to put money into investment funds if they wish to obtain residency
rights.
Want to learn more about buying property in Spain as a non-resident?
Get in touch
with one of our friendly team members today or read our blog about
buying property in Spain as a non-resident.
Ready to buy your next property in Spain?
Buying a house in Spain can be an exciting and rewarding experience with careful planning and professional assistance. Embrace the unique charm and lifestyle Spain offers, and with the right guidance, you can turn your dream of owning a property in this beautiful country into a reality.
Remember to stay informed, seek expert advice, and immerse yourself in the local culture to make the most of your Spanish property ownership. Happy house hunting.
Speak to an expert
Authorised by the FCA
Regulated by the Financial Conduct Authority.
Segregated & Secure
All client funds are held in segregated safeguarding accounts.
Real People
Our advisors are available whenever you need them.
Established in 2008
A wealth of foreign exchange experience at your fingertips.