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Prime Minister Pedro Sánchez this Monday in Seville. EFE
Spanish government plans to end 'golden visas' for wealthy foreigners buying property in Spain
Property

Spanish government plans to end 'golden visas' for wealthy foreigners buying property in Spain

The special visa grants residency to foreign nationals who invest at least 500,000 euros in the real estate market, and the move aims to guarantee more access to affordable housing in the country

José María Camarero

Madrid

Tuesday, 9 April 2024, 10:32

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Spain plans to end its so-called golden visa programme for foreign property buyers in a bid to increase the amount of affordable housing available in the country.

Prime Minister Pedro Sánchez's announcement on abolishing the special visa, which grants residency permits to foreigners who invest in the real estate market with at least 500,000 euros, means Spain would join other EU countries in scrapping this type of programme. "We are going to take the necessary measures to guarantee that housing is a right and not just a speculative business," Sánchez said.

Ministers at this Tuesday (9 April)'s cabinet meeting are to study a proposal to modify the law regulating golden visas. The measure, Sánchez pointed out, was "approved by the Partido Popular in 2013, which makes it possible to obtain a residence visa if one invests in property in our country".

Government sources pointed out that around 94% of investor visas are linked to real estate transactions (around 10,000 authorisations). Cities such as Barcelona, Madrid, Malaga, Alicante, Palma and Valencia are the most in-demand locations for this type of visa, as well as being the "most stressed areas" for housing. The government said the priority is to "guarantee access to affordable housing, in order to provide a response to citizens" and that no individual should have to spend more than 30% of their income to have a "decent, adequate and quality home".

Abolishing the golden visa has been on the cards for more than a year since the prime minister revealed the intention among a series of pre-election pledges.

At the time, in May last year, the ministry of social security confirmed the abolition was "a hypothesis that some groups have put to us and that we are going to study". It came at a time when tension in the housing market was at the centre of the political strategy of parties prior to the elections. The proposal presented by Más País-Equo in February last year - following a 7% rise in free housing prices in 2022 - called for this measure, considering the movements of foreign investors in the real estate market are "speculative".

In reality this special residence permit designed for the wealthy has not generated large numbers of residency applications; official data suggests the measure - put in place by Mariano Rajoy's government in September 2013 - has not really caught on, casting doubt on whether it is part of the problem of rising prices.

Only 500 requests per year

According to data from the ministry of foreign affairs, the government granted only 451 visas to foreigners, for their investment in real estate in 2022. The figure is almost 50% less than the previous year and just 0.7% of the total number of purchases made by non-residents.

These visas are only granted to investors who are residents outside the European Union and, according to calculations based on notary statistics, this group accounted for a total of 19,225 transactions last year. In other words, the number of golden visas issued indicates that only 2% of investors used this resource, which gives access to a residence permit when buying a home in Spain.

It is true that last year's downturn corresponds to the government's decision to cancel the granting of visas to Russian investors - who last year bought more than 1,000 homes in the country - following the outbreak of war in Ukraine. But the overall figures show this purchase channel has not been fully exploited compared to its potential beneficiaries. If we take as a reference from when it was launched, the number of golden visas issued barely exceeds 5,400.

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