On Monday April 9th, Spanish Prime Minister Pedro Sánchez announced that his government plans to get rid of the golden visa scheme which can grant non-EU nationals residency in Spain when they buy real estate worth €500,000.

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.

Sánchez’s reasoning is the impact golden visas are having on Spain’s property market, stating that “we are going to take the necessary measures to guarantee that housing is a right and not a mere speculative business” and thus “begin the procedure to eliminate the granting of the so-called golden visa”.

What rights are foreigners in Spain losing with the elimination of the golden visa?

The end of the golden visa means there will now be one less visa available to third country nationals such as Brits and Americans who want to move to Spain, albeit a visa option only up for grabs for a lucky few. 

It also means that there is no longer a visa scheme in Spain which does not require holders to become tax residents or actually live in Spain (one day a year in Spain to renew the visa was enough to not lose residency rights). 

Furthermore, non-resident second-home owners with properties in Spain worth €500,000+ will no longer have the option of becoming Spanish residents by using their Spanish property/ies as the ‘hook’ (the golden visa was retroactive).

The other ways of accessing the golden visa – investing €1 million in shares in Spanish companies, or €2 million in government bonds, or transferring €1 million to a Spanish bank account – may also cease to be means to gain Spanish residency through investment. However, a report in Spanish newspaper ABC on Tuesday citing government sources stated that residency through financial investment will be maintained. 

Admittedly, such fast-track ways to Spanish residency were only available to the approximately 10,000 wealthy people who obtained the golden visa over the past decade.

Therefore, the average foreigner residing in Spain will not be affected by the removal of the golden visa. 

Will foreigners on the golden visa need to change to another Spanish visa?

As only the initial plans have been announced, it is not yet clear whether foreigners currently on Spain’s golden visa will be allowed to hold onto the scheme or offered the option of Spanish residency through an alternative means.

The most obvious alternative to the golden visa – given that it is also suitable for non-EU citizens with plenty of savings – is the non-lucrative visa (NLV). However, the NLV doesn’t allow people to work, something the golden visa has offered. 

In this sense, the newer digital nomad visa, which includes the requirement of €2,646 in monthly earnings to be eligible, may be a better choice for some people on the golden visa or those considering applying for it. 

It is currently possible to change visas in Spain for certain situations such as work or study. 

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

Will the Spanish government take any further action against foreign visas and property ownership?

Spain’s ever-growing popularity among foreigners has been making headlines, not for positive reasons unfortunately and rather due to the impact it’s having on the country’s housing crisis. 

The proliferation of Airbnbs or other short-term holiday lets in city centres across the country, which are increasing rent prices and reducing the stock available to locals, has led to protests in Málaga and the Canary Islands in recent weeks.

READ ALSO: Why does hatred of tourists in Spain appear to be on the rise?

The record number of foreigners buying homes as well, helping to keep prices high at a time when Spaniards are not buying due to high interest rates on mortgages, has also led to calls for non-residents to be banned from buying properties in Spain. 

In the end, Spain’s PM has decided to appease public outcry by targeting the 10,000 wealthy foreigners on golden visas, arguing that 94 percent of them have homes in “stressed real estate markets”.

It showcases that Spain is willing to introduce measures that can act against the interests of foreigners, although as the Socialist government stressed in March, they have no plans to prevent foreigners from buying homes in Spain. 

However, only 451 golden visas were granted in 2022 (latest figures available), a 50 percent drop on the previous year.

This figure also represents just 0.7 percent of Spanish property sales in 2022 to non-residents, meaning that the removal of the golden visa is really just like a drop in the ocean, and not necessarily a solution that will reduce purchasing and rental costs for Spaniards. Could this result in more public pressure to limit foreigners from buying homes whilst locals can’t afford them?