Spain cancels the “Golden Visa” program

The Spanish government has begun the process of abolishing the so-called “golden visa” scheme.

Under this programme, foreign investors are provided with fast-track residency.

At a Cabinet meeting on Tuesday, ministers agreed to end the granting of visas, which can be obtained for property purchases worth €500,000 (£428,000) or more.

The visa regime was created in 2013 by the conservative government of Mariano Rajoy.

It was seen as a way to attract much-needed foreign investment in the wake of the eurozone crisis, which hit Spain's real estate sector particularly hard.

A total of 6,200 visas have been issued until 2023 to invest in real estate, according to Transparency International, although other sources put the number higher.

According to Transparency International, nearly half of Spain's golden visa beneficiaries – a total of 2,712 people – were Chinese.

Russians came in second place in terms of the number of beneficiaries, with 1,159 people, followed by Iranians (203), and citizens of the United States (179) and the United Kingdom (177).

The 'Golden Visa' scheme also provides residency in exchange for investing €2m (£1.7m) or more in state bonds, or investing in Spanish start-ups.

However, the government said that only 6% of visas were granted for reasons other than purchasing property.

Prime Minister Pedro Sanchez said his government's intention to abolish the scheme aims to “ensure that housing is a right and not just an object of commercial speculation.”

He said the majority of visas granted were linked to property purchases in places like Madrid, Barcelona, ​​Valencia, Malaga, Alicante and the Balearic Islands – all areas where the housing market is “under enormous pressure and where it is almost impossible for people who live and work in those places and pay their taxes every day to find affordable housing.” “reasonable.”

Last year, the government introduced a housing law aimed at curbing rent increases in areas where they were escalating.

Sanchez's leftist allies in his coalition government were demanding an end to the visa regime.

However, critics say repealing it will not improve matters.

“The housing problem in Spain, both in terms of sales and rental, is not caused by the Golden Visa, but by a growing lack of supply.” [of housing] And the accelerated growth in demand,” said Francisco Iñarreta, of the real estate portal Idealista.

However, pressure has also come from outside Spain, with the European Commission calling on EU members to clamp down on such schemes, largely due to security concerns, especially since the Russian invasion of Ukraine.

In 2022, the UK government ended a scheme allowing wealthy foreign nationals to settle in the country if they bring assets with them.

The following year, Ireland abolished the Golden Visa, while Portugal revised its own version, no longer allowing residency for property purchases.