Spain to Ban Housing Investments for Golden Visas to Curb Property Inflation

The Spanish government is set to prohibit investments that lead to increased housing prices in exchange for a residence permit through the Golden Visa Program. The Summary Bill to apply these new changes is currently being processed by the Congress of Deputies.

The revised bill, which is under review by the Lower House, proposes a ban on investments in projects that inflate the housing market. The reform stipulates that internationals seeking a golden visa can still invest in business projects in Spain that are deemed to have general interest. However, the investment must not contribute to housing market inflation.

The proposal highlights that allowing a €500,000 investment in property to secure a visa under the Residency by Investment Program (RIP) poses a significant risk of money laundering due to the unknown origin of the funds. It also exacerbates housing market pressures by targeting high-priced properties.

"In the current context, the conjunction of these real estate investments to obtain residence permits, together with other elements that stress the market, such as the unstoppable boom in tourist apartments or the rise in interest rates, pose a serious threat to the access to housing for medium and low incomes," the proposal states regarding changes to the Golden Visa.

In efforts to address the housing crisis, Spanish authorities last month enacted changes to the Golden Visa Program, notably eliminating the option of real estate investment. Prime Minister Pedro Sanchez confirmed that purchasing a property worth €500,000 or more will no longer qualify foreigners for residency through the RIP. Sanchez emphasized that the government is committed to ensuring housing remains a right rather than "a mere speculative business."

"I want to announce that tomorrow’s Council of Ministers is going to study a report submitted by the Minister of Housing and Urban Agenda to modify the law, approved by the Popular Party in 2013, which allows obtaining a residence visa if you invest in housing in our country," announced President Pedro Sanchez.

Previously, the real estate option was among the most popular for internationals seeking residency through Spain's Golden Visa scheme. By fLEXI tEAM