Spain to end 'golden visa' scheme for foreigners buying luxury homes

Spain is ending its “golden visa” scheme, which gave foreigners who made significant real estate investments in the nation the opportunity to remain there.

Prime Minister Pedro Sanchez assured reporters on Monday that the program’s termination will contribute to making cheap housing “a right instead of a speculative business”.

Under the scheme, non-EU nationals who invest in Spanish real estate for at least 500,000 euros ($541,250) without taking out a mortgage are granted a special permission that enables them to live and work in Spain for three years.

“Today, 94 out of every 100 such visas are linked to real estate investment…in major cities that are facing a highly stressed market and where it’s almost impossible to find decent housing for those who already live, work and pay their taxes there,” Sanchez said.

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He said that upon review of a report from the Housing Ministry, the government would begin the process of scrapping the scheme at Tuesday’s weekly cabinet meeting.

Spain issued about 5,000 permits between the beginning of the golden visa program in 2013 and November 2022, according to official government data.

A 2023 Transparency International investigation questioned if authorities looked into the origin of the funds, and it showed that Chinese investors were first on the list, followed by Russians who contributed more than 3.4 billion euros.

According to real estate website Idealista, less than 0.1% of the 4.5 million properties sold during that time were bought through the program, therefore the measure is unlikely to have an impact on the real estate market.

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According to Idealista spokesperson Francisco Inareta, the golden visa program was not the reason for Spain’s housing crisis; rather, it was a result of a shortage of supply and an increase in demand.

“This is yet another misdiagnosis—rather than promoting the entry of new homes onto the market, the measure announced today targets foreign buyers,” Inareta remarked.

Adjacent In an effort to address the housing problem, Portugal recently revised its own “golden visa” program and eliminated real estate investment. Investors who are not domestic citizens but wish to get residency rights may still contribute to investment funds.

(With agency inputs)