Concern on Costa del Sol at end of residency visa for wealthier foreigners spending half a million on property

Real estate agents on the Costa del Sol selling to foreign buyers outside the EU - including to Britons - have received a setback this week with the Spanish government's decision to abolish the Golden Visa for those investing in property. Set up in 2013, the visa scheme grants residency permits to foreigners from outside the EU who invest at least 500,000 euros in real estate in Spain.

Prime Minister Pedro Sánchez justified the move with the need to guarantee affordable housing to people in Spain. The government argued that the Golden Visa had contributed to the problem of soaring house prices in recent years and that the property market in the country had become "stressed".

The EU has been calling for member countries to toughen up these fast-track visas for richer people, arguing that the source of money invested is often murky. Countries including Portugal have recently watered down their own schemes in response.

According to Spain's housing minister, Isabel Rodríguez, the number of these special visas granted to people buying property has shot up from 461 in 2016 to 2,017 in 2023 and 3,273 last year. In total, 14,576 Golden Visas have been given out to property buyers since 2013.

Since the special visa scheme started, it is Chinese and Russians who have benefited most. But, since Brexit, many more Britons with sufficient money unable to move to Spain under flexible EU-member rules have taken advantage of the Golden Visa route and bought a home, rather than the slower and more restrictive other routes to residency.

Speaking after a cabinet meeting on Tuesday, Isabel Rodríguez said those taking out the visas were purchasing luxury real estate investments mainly in Barcelona, Madrid, Malaga, Alicante, the Balearic Islands and Valencia. These six provinces account for 90% of the authorisations, according to Rodríguez.

"In areas such as Marbella, Golden Visas already make up 7.1% of home purchases, in Barcelona they reach 5.3% and 10% in some municipalities in the Balearic Islands," the minister explained. "These transactions stress the market and increase the price of housing," she added. No individual should have to spend more than 30% of their income to have a "decent" place to live, said the government.

The news of the imminent disappearance of the Golden Visa sparked concern among the property and residential tourism industries on the Costa del Sol, as professionals fear a negative impact on foreign investment.

President of the Andalusian federation of developers and residential tourism Ricardo Arranz, who is also executive president of the Villa Padierna Hotels group, said the Golden Visa had developed quality tourism on the Costa and brought in wealth to the area.

"The unease is clear. I fear that this is another blunder," Arranz pointed out, while criticising the national government for making the decision "without consulting anyone, as a flash in the pan idea generating surprise and concern".

Turismo Costa del Sol boss Francisco Salado, of the conservative PP party, said residential tourism "is a huge source of income and employment for our country and for the Costa del Sol, and this [Golden Visa] measure has favoured the arrival of many residents with high purchasing power".

"It is absurd to think that the Golden Visa has raised the prices of housing in the cities or for young people," Salado said. "This decision impoverishes our country, generates more unemployment and only benefits other countries and competing destinations," he added.

Ricardo Bocanegra, founder of the association of foreign residents on the Costa del Sol said the government's announcement had generated concern and pointed out the Golden Visa "does not influence or distort the housing market. It only contributes to attracting high-level foreign investment. The arguments put forward are poor and do not hold water".

Buying a property worth 500,000 euros has been one way to obtain a Golden Visa. Other routes to getting one - including investing a million euros in shares in a Spanish company or two million euros in government bonds - will still be available, said the government, although take-up of these is significantly smaller than the property route.

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