Spain Axes 'Golden Visa' Program Granting Residency to Wealthy Non-EU Citizens After Large Investments in Real Estate

By Madz Dizon

Apr 09, 2024 01:11 AM EDT

Spain's Prime Minister Pedro Sanchez speaks to the press as he arrives to attend a European Council summit at the EU headquarters in Brussels on March 21, 2024.
(Photo : JOHN THYS/AFP via Getty Images)

Spain's Prime Minister Pedro Sanchez announced on Monday that the country will be discontinuing its "golden visa" program, which provides residency rights to foreigners who make significant investments in real estate.

Sanchez emphasized the importance of ending the scheme to prioritize affordable housing as a fundamental right rather than a speculative business.

Spain Ends Golden Visa Program

A special permit is granted to non-EU citizens who invest a minimum of 500,000 euros ($541,250) in Spanish real estate without the need for a mortgage. This permit enables them to reside and work in the country for a period of three years, according to AP News.

Sanchez mentioned that the government plans to initiate the process of discontinuing the scheme during Tuesday's weekly cabinet meeting, following a thorough examination of a report presented by the Housing Ministry.

According to government figures, Spain has issued nearly 5,000 permits since the inception of the golden visa scheme in 2013 until November 2022.

Chinese investors have claimed the top spot on the list, with Russians closely following by investing over 3.4 billion euros ($3.6 billion). A recent report by Transparency International raises concerns about whether authorities have thoroughly investigated the source of these funds.

According to property website Idealista, the measure is not expected to have a significant impact on the property market. This is because less than 0.1% of the 4.5 million homes sold during that period were purchased under the scheme.

Idealista spokesperson Francisco Inareta said the housing problem in Spain can be attributed to a shortage of supply and a sudden increase in demand, rather than being a result of the golden visa scheme.

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European Countries Urge to Change Housing Programs

Over the past few months, several countries in southern Europe have made changes to their housing schemes that were implemented during the financial crisis. These changes were aimed at addressing the housing crises in each respective country.

In February 2023, Portugal discontinued its golden visa program, resulting in a notable increase in house prices. More recently, Greece implemented stricter regulations for its scheme, now demanding investments of up to 800,000 euros ($868, 600). 

"These visas are a cause for concern in Europe. You can't grant someone a residency permit just because he's a millionaire," remarked Culture Minister Ernest Urtasun, who serves as the spokesperson for the Sumar party, a radical leftwing faction within Spain's ruling coalition led by the Socialists. 

In 2019, Brussels called on member states to take strong action against these schemes, highlighting their disproportionate benefits for wealthy Chinese and Russian investors. Additionally, they warned that such practices could potentially enable corruption and money laundering, NDTV reported.

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