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VISAS

Chinese investors rush to buy properties before Spain’s golden visa ends

With Spain phasing out its golden visa through property, Chinese investors are rushing to buy Spanish flats and houses in order to get residency before the scheme officially ends.

Published: 10 June 2024 12:49 CEST
Chinese investors rush to buy properties before Spain's golden visa ends
Chinese nationals have been the biggest beneficiaries of Spain's golden visa scheme together with Russians. (Photo by ISAAC LAWRENCE / AFP)

Chinese investors are increasingly buying up property in Spain before the golden visa scheme ends. The golden visa is the only way that Chinese nationals, and indeed any non-EU foreign nationals, could have all the benefits of Spanish residency without having to actually live in the country or be a tax residents.

In April the Spanish government shocked many by announcing plans to get rid of the property-based golden visa scheme, which grants non-EU nationals residency in Spain when they buy real estate worth €500,000.

It can also be obtained by investing €1 million in shares in Spanish companies, €2 million in government bonds, or transferring €1 million to a Spanish bank account, options which are likely to remain available to wealthy foreign investors.

READ ALSO:

The scheme has long been controversial. Many viewed it as essentially selling Spanish (and therefore European) residency, and it has been blamed by some for creating a tiered immigration system.

Described as a “European disgrace…which creates first and second-class citizens” by Spain’s Culture Minister, the golden visa has become increasingly questioned by the EU and eliminated or amended by a number of European countries in recent years.

However, despite the announcement in Spain it remains unclear when exactly when the scheme will end because the government has not announced a date, so it is therefore is not yet in force.

READ MORE: When will Spain’s golden visa scheme officially end?

But with a deadline looming somewhere down the line, Chinese investors are now purchasing properties before it’s too late and speeding up the processes to do so.

Long Fang, CEO of Bafre Inmobiliaria, told Spanish state broadcaster RTVE that demand among Chinese buyers has grown since the announcement. “We’ve noticed growing demand,” she said, adding that the number of Chinese golden visa purchases handled by the company has quadrupled. 

INTERVIEW: ‘There are three main alternatives to Spain’s golden visa’

Chinese buyers, Fang says, are not looking solely for property but also a visa “that facilitates entry and exit when travelling for business or tourism with the family.” In the long term, they often end up renting the properties they buy.

Spanish daily El País has reported on the types of properties Chinese investors purchase through the golden visa scheme, and it varies.

Many will buy several cheaper flats to reach the €500K mark and then rent them out, whereas some will purchase industrial properties in order to set up businesses, and others will buy luxury properties, such as one buyer cited in the piece who recently bought a €975,000 chalet in Madrid.

According to Foreign Ministry figures cited in a report on golden visas by Transparency International, the Chinese benefited most from the golden visa scheme, with a total of 2,712 visas issued since 2019 . Of these, 99.33 percent were via property purchases.

Russians were the second most common recipients of golden visa, with a total of 1,159 visas, 94.65 percent of which were via property acquisitions.

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PROPERTY

VUT, AT and VV: Why Spain’s holiday let categories matter to owners

Have you ever seen the acronyms VUT, AT and VV when it comes to renting out your apartment short-term to tourists? Confused and want to know what it all means and why it matters for you? Read on to find out.

Published: 19 June 2024 14:52 CEST
VUT, AT and VV: Why Spain's holiday let categories matter to owners

VUT stands for Vivienda Uso Turístico or Property for Tourist Use, while AT stands for Apartamento Turístico or Tourist Apartment.

Sometimes tourist apartments are called VVs or Viviendas Vacacionales (Holiday Homes). They have the same rules and classifications as ATs, but are just called by a different name.

These two categories above, although are similar, are actually different and mean different things for both those who want to rent out their properties and those renting them.

The main differences are in the legal requirements, in accordance with the regulations of each region they’re located in.

READ ALSO – UPDATE: Which cities in Spain have new restrictions on tourist rentals?

What are VUTs?

VUTs can be houses, apartments, chalets or individual rooms and they can be rented through agencies or directly from the landlord. They are rented out for days or weeks at a time to tourists, but are rarely rented out for months, because then they would then be considered as tourist apartments (ATs) or long-term lets instead.  

The exact amount of time they can be rented for typically depends on the rules in each different region in Spain. These regional regulations also determine if you need a tourist licence to rent out your property or if you need to register with an agency for example.

They can be someone’s habitual home, which is occasionally rented out on platforms such as Airbnb when they go on holiday for instance. Or a home that is only rented out to tourists during a particular season.

What are ATs?

ATs on the other hand are only for tourist use and are never used as someone’s habitual home as well. In order to be legal, they need to have a tourist licence, register with competent organisations, adhere to quality and security regulations and also provide services such as cleaning and possibly a reception or concierge.

Tourist apartments are governed by Royal Decree 75/1997, which regulates the legal regime for the control of tourist apartment establishments.

Again, each region in Spain has its own laws regarding these types of accommodations. Some places have limits on the number of them allowed, while others have regulations on where they’re allowed.

For example, Seville recently announced it wouldn’t grant any more tourist licences for apartments located in the Old Town neighbourhoods, while Barcelona hasn’t been issuing new ones for years.

Málaga has also introduced new rules that tourist apartments must have separate entrances and some regions only allow them on the first floor of a building.

What are the main differences between ATs and VUTs?

ATs are intended for tourism use, with usually a stay of no more than three months, anywhere above this time and it’s a long-term let.

VUTs as mentioned before are typically rented out for less than 30 days and in some regions, it can only be a maximum of five days.

If you have a VUT, it’s not required for you to provide professional services, like cleaning, although if you rent it out on a platform like Airbnb you will be expected to carry out these duties, even if you do it yourself.

But, remember the classification isn’t always up to you and what you intend to use the property for. For example, in Barcelona a tourist licence is needed for any rentals of fewer than 31 days and the property must be for tourism purposes only, therefore it can only be a AT and not a VUT.

What do I need to know regarding these classifications?

Basically, whether your property is a VUT or an AT, you need to contact your local authorities before you start renting it out to tourists for any length of time and find out what the local rules and regulations are.

If you’re a tourist, then you’ll know that ATs typically have more regulations than VUTs and offer more services, and you can be sure that they’re legal and have a tourist licence too.

If the property is a VUT and just rented out to holidaymakers occasionally, it’s important to find out what services, if any, will be included and if the property is operating legally. You can do this by asking them for their tourist licence number, if one is needed.

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