Ben Pawlowski
SPAIN’S Prime Minister Pedro Sanchez has pledged the removal of so-called ‘golden visas’ which granted residency to foreigners who purchased a property for €500,000 or more.
Previously, the scheme allowed foreigners to obtain a three-year residence permit, extendable for another two, by investing at least €500,000 in real estate in Spain, excluding any charges or mortgages.
The mechanism also applied to investments of more than €1million in deposits or shares of Spanish capital companies, or more than €2million in government bonds.
The scheme was introduced in 2013 in the wake of the housing market crash and Euro crisis as a means to re-invigorate the country’s property sector through foreign investment.
However, the policy has since come under severe scrutiny, with critics claiming it creates inflationary pressures and acts as a back door for dirty money to enter the Spanish economy.
Now, Pedro Sanchez’s Socialist-led government has vowed to end the scheme after a press conference from the Prime Minister in the Sevillan neighborhood of Dos Hermanas this afternoon.
Sanchez, 52, said: “I want to announce that tomorrow the ministerial cabinet will study a report submitted by the Minister of Housing and Urban Agenda to modify the law approved by the Partido Popular in 2013, which allowed people to obtain a residency visa if they invest in property in our country”.
Sanchez added that 94% of approved visas were related to property investment and located in regional capitals such as Barcelona, Madrid, Malaga and Valencia, ‘cities where the housing market is stressed’.
“We do not want a speculative investment model with housing”, added the leader of the PSOE Socialists.
The move comes in the build-up to crucial local elections in Catalunya and the Basque Country, with Sanchez stating that his main policy aim is to ‘guarantee access to affordable housing, to respond to the public, and assure that no citizen has to spend more than 30% of their income towards having a suitable, quality home’.
In 2022, Spain granted 2,462 residency permits to investors who had bought properties with a value exceeding €500,000, a 60% increase from the previous year.
The Spanish government has granted a total of 11,464 individual authorisations since the golden visa was introduced, in addition to 19,805 authorisation for family reunification.
Last year, countries including Ireland, Portugal and Greece cancelled their version of the ‘golden visa’ scheme as critics highlighted a lack of affordable rental housing stock in its major cities.
However, housing experts have warned that a cancellation of the scheme could damage the Spanish economy by discouraging crucial investment from its European neighbours.
Foreign buyers accounted for 15% of all homes bought in Spain last year, an all-time high – Brits topped the home-buying charts with 8,173 purchases in 2023, closely followed by Germans and the French.
In a tweet, Sanchez said: “Housing is a constitutional right and not a mere speculative market. That is why we are going to eliminate the ‘Golden Visa’, the law approved by the PP that allows you to obtain a residence visa if you invest more than €500,000 in housing in our country”.
He added: “Having decent housing cannot depend only on market rules. This will be the legislature that turns housing into the fifth pillar of the welfare state”.
READ MORE:
- Golden Visa under threat
- Expat property investors sweating over threat to Spain’s ‘colonial’ Golden Visa scheme
- Foreign buyers accounted for 15% of homes bought in Spain last year – the highest figure ever
