Spain Plans to Scrap ‘Golden Visa’ Program Amidst Housing Crisis

Spain’s Prime Minister Pedro Sanchez announced the country would abolish its “golden visa” scheme, which allowed residents to issue a special permit to stay to foreigners in return for their investment in Spanish real estate. Sanchez insisted that the termination of the program is meant to veer focus on the question of affordable housing as a fundamental right, not a real speculative adventure.

Under the program, third-country citizens who are investors and acquire one or more properties in Spain with a total value equal to or greater than €500,000 per investor, even if they acquire them through a company that is owned, free of all encumbrances, and not applied to the acquisition of furniture or supplies, Sanchez went further to point out that nearly 94 out of 100 of these visas were connected to real estate investments in major cities, thereby exacerbating the then-existing housing challenges for the residents.

A report prepared by the Housing Ministry said that it had been reviewed and that the scheme is likely to start to be abolished in the weekly cabinet meeting. Since it started in 2013 until November 2022, Spain has issued permits under the golden visa program to just close to 5,000 applicants, with Chinese investors leading the list and followed by Russians.

However, experts in the property industry believe that abolition is highly unlikely to affect the property market, as the purchases under the scheme form a minuscule portion of total property dealings. Francisco Inareta, a spokesman for Idealista—one of the biggest property websites—said Spain had a problem of a lack of houses, together with growing demand outrunning “golden visa” limits.

This comes after neighboring Portugal recently overhauled its golden visa program, excluding real estate investments to overcome housing challenges. Portugal now encourages its residents by investing in funds. The European Commission has consistently over the years called for phasing out the programs, saying they compromise security.