The Minister of Housing and Urban Agenda, Isabel Rodriguez, proclaims the tip of Spain’s Golden … [+]
Spain, one of the popular and successful granters of residence permits through investments in Europe, higher often known as the “Golden Visa”, has decided to abolish this system.
According to the federal government’s official announcement, the controversial system that enables wealthy foreigners to amass residency rights through investments can be abolished primarily to curb real estate speculation and “to… Make sure housing is a right and not only a speculative business.”
Isabel Rodríguez, Minister of Housing, told the Council of Ministers on April 9 that for the reason that measure was introduced in 2013, the country had issued 14,576 “golden visas” for so-called real estate investments, which mainly benefited foreign residents from China, Russia, Great Britain , USA, Ukraine, Iran, Venezuela and Mexico.
According to the minister, the variety of applications has accelerated within the last two years: 2,017 visas were approved in 2022, 3,273 in 2023 and 424 in February 2024.
Last 12 months, the federal government considered doubling the minimum investment amount required to 1 million euros somewhat than abolishing the Golden Visa entirely.
The recent significant increase has alarmed the federal government and led it to scrap the golden visa system altogether.
It is feasible to grant a Spanish residence permit to non-EU residents by purchasing a property for at the very least 500,000 euros … [+]
The “hottest” markets
The program, which allows non-EU residents to acquire a Spanish residence permit by purchasing a property for at the very least 500,000 euros, has contributed to property prices becoming unaffordable for local residents, particularly for young prospective buyers and particularly in popular ones Cities comparable to Barcelona, Madrid, Malaga, the Balearic Islands, Alicante and Valencia, which face significant housing shortages and where 90% of visas have been granted.
“In these cities with severely tight housing markets, it is almost impossible to find adequate housing for those who live and work there and pay their taxes every day,” said Prime Minister Pedro Sánchez, adding that his government has been out since this week sei will take the primary steps towards abolishing golden visas, which have turn out to be the goal of national and international controversy – and a sensitive political issue.
“This is not the model of a country that we need – one of speculative investment in housing – because it is a model that is leading us to catastrophe and, above all, increasing inequality,” Sanchez added.
Politically toxic golden visas
As reasonably priced housing has turn out to be a key public concern and rising housing costs have pushed residents out of their neighborhoods, the Golden Visa has been seen as politically toxic, causing divisions inside the coalition government and increasing pressure to finish this system.
The age at which young people leave home in Spain rose to 30 last 12 months, in comparison with the EU average of 26. based on OECDand quoted by Business Insider.
“Young people in Spain have difficulty making the transition to adulthood and seeking employment outside the region where their parents live,” the study says.
With the Golden Visa program coming to an end in Spain, buyers are expected to rush to get in … [+]
Two other realities add to the pressure:
- The examples include Portugal, Greece and Ireland, which have already restructured or ended the controversial system;
- Strong disapproval from European Union officials, who’ve stressed that member countries must quit every little thing Golden Visa programs attributable to security risks in addition to concerns about corruption, money laundering and tax evasion.
Unethical and dangerous
That of the European Parliament Civil Liberties Committee has deemed the system “objectionable from an ethical, legal and economic perspective.”
According to EU headquarters in Brussels, the initiative, which allows wealthy foreigners to “buy” the best to reside – sometimes without even having to live within the country – “has become a security risk by allowing money laundering, tax evasion and terrorist financing.” Corruption and infiltration by organized crime are incompatible with EU standards.”
A study published last 12 months and reported by the Financial Times said: “The Spanish branch of Transparency International said the country had issued 2,700 visas to Chinese nationals and more than 1,100 to Russians.”
The programs were rolled out across Europe to draw foreign investment and spur recovery from financial crises brought on by a crash in property markets.
“In order to stimulate the country’s economy, the Spanish government launched the Golden Visa program in 2013, which grants residence permits to applicants who meet the necessary requirements and have made significant investments, thereby granting residency to the beneficiaries visa-free access to the Schengen area and, among other benefits, a path to permanent residency,” Schengen visa info Reports.
“Through the program, investors could initially obtain a three-year residence permit, which can be extended for five years, after which they can obtain permanent residency,” it said Henley & Partnersan organization that advises on citizenship and residency investments.”
“The reassessment is part of a broader tightening of these policies in Europe and elsewhere amid concerns about security, inflation and questions about whether the programs are actually stimulating the economy,” the Washington Post reports.
The end of Spain’s Golden Visa program was met with a wave of criticism, particularly in high-value areas. The important argument is that the measure has no real impact Access to housing for the lower and middle classes.
As residential property investment plans come under increasing scrutiny and are altered or canceled as in Portugal and Greece, buyers in Spain are expected to rush to purchase before the door finally slams shut.
