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VISAS

Portugal and Ireland have scrapped their golden visas. Will Spain be next?

Portuguese and Irish authorities have announced they will stop offering ‘golden’ residency visas to rich non-EU foreigners who purchase expensive properties, and there are political calls within Spain for the same thing to happen here. 

Portugal and Ireland have scrapped their golden visas. Will Spain be next?
Ronda in Málaga province. There is increasing pressure at a regional and national level to ensure that residents in Spain are not priced out by wealthy second-home owners. Photo: Jordi Vich Navarro/Unsplash

Portuguese Prime Minister António Costa on February 16th announced that as a means of tackling the increasing lack of affordable housing in the country, his government will no longer offer residency to foreign property buyers or other investors through so-called golden visas.

Furthermore, Portuguese authorities will not grant new licences for short-term tourism rentals either, except in rural areas suffering from depopulation. 

Any third-country national wishing to renew their pre-existing golden visa will have to prove that their Portuguese property is being rented out on a permanent long-term basis, rather than as a holiday home.

These drastic measures come 11 years after Portugal’s golden visa was first introduced, with 11,535 residency authorisations issued and €6.7 billion in foreign investment. 

Back in 2012, there was a need for such a scheme to exist and it had largely met its objectives, Portuguese government officials have said.

But “the fight against price speculation in real estate” takes precedence now for Costa, who denied he was “killing the goose that laid the golden eggs” when referring to the tourism industry. 

Portugal has toughened its golden visa rules since 2020, making the financial requirements higher and preventing foreign property purchases in Lisbon and other areas where locals were being priced out by wealthy foreigners. 

Now they have taken the decision to fully scrap it, with the news coming just a day after the Irish government announced it would also axe its own golden visa scheme, citing internal and external reviews which recommended doing so. 

These decisions come after years of warnings by the EU that such foreign investment residency deals were a risk to security, transparency and the bloc’s values. 

This has been highlighted by the joint ban of golden visa applications by Russian tycoons looking to flee to Europe following their country’s invasion of Ukraine. 

So how about Spain and its golden visa? Is it also at risk of being scrapped?

On February 14th, Spanish political party Más País lodged a legal proposal at the Spanish Parliament calling for Spain’s golden visa scheme to also be abandoned. 

Their spokesperson Íñigo Errejón voiced the same reasons as those given by Portugal’s government – put an end to – or at least lessen – property speculation in Spain. 

“They’re driving up prices and kicking residents out of their neighbourhoods,” Errejón said of the influence of second homes on Spain’s property market.

For the former Unidas Podemos politician, these residency permits distort the market and don’t benefit the national economy.

It’s worth noting that Más País does not have much political clout in the Spanish Parliament, with only 3 seats out of 350, but could the tides be changing for wealthy foreign property buyers in España?

Spain is already one of only a few countries in the world that has a wealth tax for both residents and non-residents, and a new ‘solidarity tax’ for millionaires was also introduced in 2023. 

In recent weeks, regional governments in Spain’s two archipelagos – the Canary and Balearic Islands – have both announced that they were considering whether they should limit the sale of properties to non-residents as a means of quashing spiralling rents and property prices, something Canada has just decided to do.

The same proposal has been voiced by Podemos’s Alejandra Jacinto in Madrid.

Property prices are indeed on the up across Spain’s most popular spots, and in cities such as Málaga, there are now more tourist rental properties in the city centre than there are actual residents. 

Needless to say, rents in the southern city are up by 25.8 percent in 2023 compared to the previous year and property prices by 15.5 percent, as a result in large part of the proliferation of more profitable tourism rentals. 

It’s an election year in Spain and access to housing is one of the main concerns among Spain’s 48 million inhabitants. 

Spain’s ruling left-wing coalition government is yet to comment on whether it intends to change anything regarding Spain’s golden visa scheme, but there is increasing pressure at a regional and national level to ensure that residents in Spain can afford a home. 

Therefore, anyone considering getting a Spanish golden visa would do well to apply sooner rather than later if they want to be on the safe side.

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PROPERTY

How to contest the cadastral value of your Spanish property

The cadastral value and cadastral reference of a property in Spain affect various factors including how much yearly property tax and inheritance tax you'll pay. Here's how to change the valuation Spanish authorities give your home.

How to contest the cadastral value of your Spanish property

When it comes to taxes, everyone wants to know if there are ways to pay less. While it’s not always possible, there are certain factors that affect particularly taxes associated with your Spanish property – namely the cadastral value and the cadastral reference. But, can they be changed or rectified?

What is the cadastral value?

The cadastral value is applied to all properties in Spain. It’s the value applied to your property by the Ministry of Finance or Hacienda and serves as a tax base to determine how much IBI tax or Impuesto sobre Bienes Inmuebles you pay for example. This is a yearly tax for all those who own property in Spain.

READ ALSO: What is Spain’s IBI tax and how do I pay it?

The value will depend on the size of your property, the condition it’s in, the year it was built and the cost of construction, among other factors.

It differs from the cadastral reference, which is an estimate of the market value of a property and is used as a reference for the real estate market. It is also used as a tax base for inheritance and property transfer tax.  

How is it determined?

At the beginning of each year, the cadastral value of homes is reviewed, and as a result, it can increase or decrease. This is why your IBI bill can increase or decrease too. As a general rule, the cadastral value is usually much lower than the market price, but this is not always the case.

How do I find out the cadastral value? 

To know the cadastral value of a property, you must first know the cadastral reference. Then you can find the value in the corresponding public records online. You can find this reference on your IBI bills, as well as on your property deeds.

Once you have this you can go to the electronic headquarters of the Cadastre, and click on ‘reference value’. There you will find all the information about the cadastral reference and the corresponding cadastral value.

Even if you’re not the owner of a property, but want to find out the cadastral value of a property you’re considering buying, you can find it out here.

Can I change the cadastral value of my home?

Yes, it is in fact possible to change the value. If you believe that the cadastral value of your property is too high with respect to the market price of your home, you can request that it be reduced.

You may want to do this in order to lower your IBI bill or if you want to sell your property at a lower price than the market value.

How do I lower the value?

If you believe that you have a case for changing it, you can make a claim to the General Directorate of Cadastre, overseen by the Ministry of Finance. There are two different claims you can make:

  • The procedure for correcting discrepancies
  • The procedure for rectification of material and arithmetic errors.

Procedure for correcting discrepancies

This option is typically used when there is a large difference between the market price and the cadastral value of a property, as well as when there are errors or false data about the characteristics of your home.

To do this, you must go to the Cadastre office in your municipality or apply online at the Cadastre Electronic Headquarters.

Procedure for rectification of material and arithmetic errors

The second option is used when there are errors or incorrect urban planning information, which affects your home. Again you can do this in person or online. In this case, it will have a retroactive effect. If you have paid too much IBI in the past, then it should be returned to you if the application goes in your favour.

Can I change the cadastral reference of my home?

If the reference value of your home is higher than the market value, then you may be wondering if you can change the reference in order to lower your tax base.

Unfortunately, you cannot request changing this in the same way as you can with the cadastral value. But, the good news is that there is a way to challenge it indirectly.

To do this you will need to request an appraisal from a company approved by the Bank of Spain. If the result of this turns out to be lower than the reference, you can try to rectify your self-assessment tax return, providing the appraisal as evidence that you should be on a lower tax base. As mentioned above, this will only affect certain taxes like inheritance or property transfer. 

In order to approve this, the tax office will need a report from the General Directorate of the Cadastre who may be able to rectify the reference and provide a report to settle the matter.

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