Spain Ends Golden Visa Program Amid Housing Crisis Concerns

Spain has officially terminated its “golden visa” scheme, exactly one year after Prime Minister Pedro Sánchez announced the government’s intention to do so. The program, which allowed non-EU nationals to secure Spanish residency by investing a minimum of 500,000 euros in real estate, was brought to an end with the implementation of a new law that also addresses broader issues tied to the “efficiency of public services” and housing policy.

Sánchez defended the move by pointing to the growing housing crisis in the country, saying in April 2024 that access to affordable and decent housing had become “the main problem faced by families and young people” in Spain. The scheme had been in place since 2013 and, over the course of a decade, granted more than 14,500 residence permits through property investment.

The Spanish government reported that 94 out of every 100 applications were processed through real estate investment, with a significant increase in demand following events such as Brexit and the outbreak of war in Ukraine. The majority of golden visas were concentrated in regions like Barcelona, Madrid, Malaga, Alicante, the Balearic Islands, and Valencia, which together accounted for 90% of the approvals. The principal beneficiaries of the program were Chinese and Russian nationals, according to the Spanish news agency EFE.

In line with recent decisions in neighboring countries such as Portugal, which have also reviewed or repealed similar investor visa programs, Spain has amended its legislation. The revised law now focuses on supporting entrepreneurs and promoting internationalization, removing the provisions that previously enabled residence through investment.

The government is also considering further steps to limit real estate acquisitions by non-EU buyers. One proposal involves introducing a tax deterrent, which may take the form of either a 100% VAT or a property transfer tax, although the specific mechanism has yet to be confirmed.

The Spanish golden visa scheme allowed foreign investors to gain residency not only through real estate purchases but also via investments in bank deposits, public debt, investment funds, and business ventures deemed to be of general interest.

Portugal’s version of the program was scrapped by parliamentary vote in July 2023, with the termination officially taking effect later that year as part of the “More Housing” initiative introduced by the administration of former Prime Minister António Costa. While Portugal no longer accepts new applications from non-EU investors, existing permits can still be renewed under the updated rules.

Both Spain and Portugal are grappling with a significant housing shortage, particularly in the rental market. The lack of affordable housing options has been driving up prices, especially in high-demand urban areas and popular tourist destinations.

By fLEXI tEAM