Spain to Scrap 'Golden Visas' for Foreign Real Estate Investors
Spain is pulling the plug on its "golden visa" scheme, which grants residency rights to foreigners who make real estate investments in the country. Prime Minister Pedro Sanchez announced this to reporters on Tuesday, April 9, following a meeting with Cabinet members.
"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 was quoted as saying.
What is a "golden visa"?
The so-called golden visa is a residence-by-investment scheme that allows non-EU nationals to get a residency permit for the country by buying a house or making a large investment. It started in 2013 amid the housing market crash and the euro currency crisis.
There are three options for Spain's residency-by-investment program: real estate investment amounting to €500,000, business development at €1 million, and capital transfer at €1 million. The real estate investment may be a purchase of a residential or commercial property or both. The property may also be rented out.
It can be remembered that Filipina actress Bea Alonzo announced in a press conference in November 2022 that she invested at least 500,000 euros (approximately P30 million) in an apartment in Madrid. This, in effect, granted her a "golden visa."
"Yung Spanish government kasi, if you have a certain amount to invest sa real property nila, you will be granted a Golden Visa, which means you are automatically a resident. After two years, you can apply for citizenship, which I'm not gonna, of course, but at least there is that option," she explained during the Start-Up PH media event.
In 2023, DoubleDragon’s hotel subsidiary, Hotel101, launched a promo urging real estate investors to purchase at least three units in Hotel101-Madrid. This gives buyers the option to have their "golden visa" processed for free by DoubleDragon’s advisory service providers: Orience, PSI Consultants, and L&L RSM Law. The unit pre-selling promo ended on December 31, 2023.
Spain's "golden visa" also allows holders to travel visa-free within the Schengen area of the European Union. It also authorizes foreign investors to live and work in Spain; and stay for one year, subject to extension. The benefit is extended to immediate family members.
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Why is Spain stopping its "golden visa" scheme?
"Golden visas" are gradually being phased out after the European Commission urged Member States to repeal any existing investor citizenship schemes (a.k.a. "golden passports"), which are technically different from the residency-by-investment scheme, in 2022. Just the same, EU countries started scrapping or amending their "golden visa" program, including Ireland in February 2023; Portugal, which removed the real estate investment clause in October 2023; and Netherlands in January 2024. The EU cited security risks as a reason for the crackdown.
Spain's Minister of Housing said that more than 14,000 "golden visas" have been issued, mostly to citizens of China and Russia, between 2013 and 2023.
