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Spain to scrap golden visa for wealthy foreigners

Spanish Prime Minister Pedro Sánchez on Monday announced his plans to get rid of the golden visa scheme which grants non-EU nationals residency in Spain when they buy real estate worth €500,000. 

Published: 8 April 2024 14:38 CEST
Spain to scrap golden visa for wealthy foreigners
Spain's Prime Minister Pedro Sánchez plans to end the golden visa scheme that gave wealthy third country nationals residency rights in Spain if they bought a home in the country worth half a million euros. (Photo by OSCAR DEL POZO / AFP)

In the face of a housing crisis affecting millions of Spaniards but which has seen foreigners buy up homes in record numbers, Socialist Prime Minister has announced plans to scrap Spain’s visado de oro.

“We are going to begin the procedure to eliminate the granting of the so-called golden visa, which allows access to Spanish residency when more than half a million euros are invested in real estate,” Sánchez told journalists in Seville on Monday.

“We are going to take the necessary measures to guarantee that housing is a right and not a mere speculative business.” 

Access to the golden visa has also been open to those who invested €1 million in shares in Spanish companies, or €2 million in government bonds, or transferred €1 million to a Spanish bank account. 

Therefore, Spain’s golden visa has come to be known as one of the ‘easiest’ ways of gaining Spanish residency as a third country national, for those wealthy enough. 

Some of the other perks it has offered are that family members could be included on the visa, the option of not being a tax resident in Spain or having to live there, and freedom of movement around the Schengen Zone.

Since Spain’s golden visas came into force in 2013, more than 11,500 have been granted, along with another 20,000 authorisations for family reunification.

READ ALSO: What the end of Spain’s golden visa means for foreigners

However, these ‘wealth’ visa schemes have come under increasing scrutiny across Europe in recent years, seen as offering some criminals a gateway to life in Europe and allowing wealthy foreign property buyers to distort the real estate market.

The proportion of foreigners who bought properties in Spain in 2023 was higher than ever before, 15 percent of the total. 

There is also evidence that in recent years foreign buyers have been willing to splash out more and more on a Spanish home.

READ ALSO: When and why is Spain axing the golden visa?

According to Sánchez, 94 in every 100 golden visas issued were linked to properties bought in popular provincial capitals such as Barcelona, ​​Madrid, Málaga, Alicante, Valencia or Palma de Mallorca where property prices and rents have all risen exponentially.

The Netherlands, Portugal, Ireland, Greece and Malta have all either scrapped the equivalent of their golden visas or made the conditions much harder for millionaires who want to make a real estate investment.

Upon hearing the news, Spain’s hard-left Culture Minister Ernest Urtasun referred to the Spanish golden visa as a “European disgrace”, adding that “it cannot be that someone is given a residence permit for the fact of being rich; this is creating first and second-class citizens.”

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VISAS

When will Spain’s golden visa scheme officially end?

Last April, Spain's PM said he would axe the golden visa through real estate investment, but no law has come into force yet. The government's coalition partner has now called for it to happen "immediately", so when will the scheme actually end?

Published: 15 May 2024 12:44 CEST
When will Spain's golden visa scheme officially end?

On April 8th 2024, Spanish Prime Minister Pedro Sánchez announced his plans to get rid of the golden visa scheme which grants non-EU nationals residency in Spain when they buy real estate worth €500,000. 

“We are going to begin the procedure to eliminate the granting of the so-called golden visa, which allows access to Spanish residency when more than half a million euros are invested in real estate,” Sánchez told journalists in Seville.

READ ALSO: What the end of Spain’s golden visa means for foreigners

The golden visa is also available to those who invested €1 million in shares in Spanish companies, or €2 million in government bonds, or transferred €1 million to a Spanish bank account. These golden visa options will be kept in place.

It is thought that the government has made this decision regarding the golden visa through real estate as a response to increasing pressure due to the current housing crisis in Spain, and due to a spike in applications in the last two years. But some experts argue that it’s simply a political move. 

ANALYSIS: Is Spain’s decision to axe golden visa about housing or politics?

So when will the golden visas officially be axed and can you still apply for them in the meantime?

The truth is that no one knows exactly when the scheme will end because the government has not announced a date and the legislative change has not been published in the BOE state bulletin, and therefore is not yet in force.

Despite the big announcement by Sánchez and the international attention the news garnered, so far the Spanish Cabinet has only analysed a report studying the modification of the law that gives wealthy foreigners the chance to obtain residency without the commitments of residency (time spent in Spain, tax etc).

However, on Tuesday May 14th the government’s junior coalition partner, hard-left party Sumar, announced that they wanted to speed the process up and get the modification of the golden visa conditions as soon as possible through Spain’s different legislative branches.

Sumar spokesperson Íñigo Errejón told journalists his party has now registered an official bill proposal to eliminate the golden visa.

“The PSOE announced a study into the golden visa. Presenting a study is good, but presenting a law is better,” Errejón argued.

These visas are a privilege that must be scrapped “immediately” because they have an inflationary effect on the housing market, he stated, adding that other countries such as Ireland, Portugal and Greece have already taken similar measures in order to not become “tourist colonies” or “money laundering” locations.

On average, draft bills take an average of five months to make their way through from the Spanish Cabinet to the Parliament, Senate, Parliament again and their eventual approval after publication in the state bulletin. 

Jesús Ruiz Ballesteros, economist and managing partner of Ruiz Ballesteros Abogados, a firm specialising in Spanish visas, has said that the news of the elimination of the golden visa has generated legal uncertainty for both investors and professionals, leading to a flood of enquiries.

“People ask why it hasn’t been withdrawn yet and they want to know if they still have time to apply for it,” he explained.

The cancellation of the residence permit has not yet been approved nor has it been published in the Official State Gazette, “therefore it is still valid”. 

The lawyer has criticised the government for not being clear and announcing an end date, a similar sentiment echoed by lawyer Miguel Manzanares, CEO of Manzanares Lawyers in Marbella, in conversation with Join Sean Woolley, Managing Director of Cloud Nine Spain.

“We know very little right now, it was really a very brief announcement by the Prime Minister and the Spanish Cabinet. 

“We don’t know what’s going to happen with the other golden visa avenues or how the law is going to be regulated…the small print, the conditions”.

“It will happen, it’s been decided by the Council of Ministers,” Manzanares argued when asked if there was any way the Spanish government could backtrack, but stressed that “we don’t have the answers” with regards to whether people can still apply for the golden visa or if those who already have it can renew. 

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

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