The Spanish government has initiated the procedure to abolish the Golden Visa programme for foreign property investors which, under this programme, grants a three-year renewable residence permit.

During a meeting of the Council of Ministers on 9 April 2024, ministers reached a consensus to end the practice of granting visas in exchange for the purchase of properties valued at 500,000 euros or more.

"Today, 94 out of every 100 such visas are linked to property investment... in big cities that face a very stressed market and where it is almost impossible to find decent housing for those who already live, work and pay taxes there", said Pedro Sánchez.

The golden visa programme was created in 2013 during the government of Mariano Rajoy, who then led the conservative government.

It was seen as a means of attracting crucial foreign investment following the impact of the eurozone crisis, which hit Spain's real estate sector hard.

Ending this programme would help make access to affordable housing "a right and not a speculative business", said Pedro Sánchez.

Gold visa in Spain

According to the report discussed in the Council of Ministers, 3,273 were granted in 2023.

However, according to Transparency International, 6,200 gold visas related to real estate investments were granted in 2023. However, other sources suggest that the actual figure may be higher.

In addition, Transparency International notes that 2,712 Chinese nationals, representing more than 50 per cent of the total number of beneficiaries, received gold visas from Spain. Russians were the second largest group of beneficiaries, with a total of 1,159. They were followed by Iranian nationals, who received 203, and Americans and British nationals, who received 179 and 177 respectively.

Spain's Golden Visa programme also grants residency in exchange for investing 2 million euros or more in government bonds, or 1 million in the case of investing in promising Spanish companies.

According to the Spanish government, only 6 per cent of visas were granted for purposes other than property acquisition.

According to him, most of the visas granted were related to the purchase of homes in cities such as Madrid, Barcelona, Valencia, Malaga, Alicante and the Balearic Islands.

These are all regions experiencing significant tensions in the housing market, making it extremely difficult to find affordable housing for local residents who contribute to the economy with their work and taxes.

Some regions of the country, such as Ibiza in the Balearic Islands, have been hit hard by rising rental prices.

In 2023, the Spanish government implemented housing legislation with the aim of limiting the escalation of rental prices in places where they have risen rapidly.

Conclusion

President Sánchez's left-wing partners in his coalition government have repeatedly advocated an end to the visa programme.

However, its detractors argue that its eradication will not improve the situation.

"The housing problem in Spain, both for sale and rent, is not caused by the golden visas, but by the growing lack of supply and the exponential increase in demand," said Francisco Iñareta, a representative of the property portal Idealista.

However, external pressure has also been exerted on Spain, as the European Commission has urged EU countries to crack down on these programmes. This is mainly due to security concerns, especially in light of Russia's invasion of Ukraine.

The UK government ended, in 2022, its scheme that allowed foreigners with large estates to settle in the country if they brought assets with them.

The following year, Ireland abolished its Golden Visa programme, while Portugal modified its own iteration, ceasing to provide residency in exchange for the acquisition of property.

Australia earlier this year discontinued a programme for investors investing more than 5 million Australian dollars, or 3.3 million US dollars, in favour of allowing in more skilled workers.

We will have to see how they articulate the cancellation of the programme, and whether they mention anything about people who already hold investment residency, especially in relation to its renewal.

In our firm we have been advising individuals and companies on living, retiring and doing business in Spain for more than 35 years.

Depending on your objectives, you may want to consider other options in addition to the well-known golden visas. We will be happy to assess your case and advise you on the best option for you and your family.