Spain has decided to discontinue its “Golden Visa Investor Program,” which allowed foreign nationals to obtain a three-year residence permit through investment. To qualify, investors needed to put at least €500,000 into Spanish real estate. Spanish Prime Minister Pedro Sánchez announced the decision, stating that housing should be a right, not a tool for speculative business. Recently, other EU countries have also begun phasing out similar “Golden Visa” programs, a move welcomed by the European Commission, which has long warned that these schemes can lead to corruption and money laundering.
What is Spain’s Golden Visa?
The «Golden Visa in Spain 2024» offers a residence permit based on investments, targeting non-EU citizens who wish to invest in Spain. Eligible investments include real estate, local company shares, bank deposits, or government bonds.
Launched in the fall of 2013, the program aimed to support the international mobility of skilled professionals and executives, while also attracting foreign investments. The Golden Visa program in Spain provides a simplified process for obtaining a residence permit.
Thanks to Spain’s Golden Visa program, thousands of foreign nationals have been able to live or start businesses in Spain by purchasing real estate. Although the program does not offer immediate citizenship, investors can apply for citizenship after 10 years of residency in the country.
Reasons for Ending the Golden Visa Program
Recently, there has been news that the Spanish government is considering suspending the Golden Visa program. The primary reason is the increased tension in the real estate market in major cities, where rising housing prices have made it difficult for Spaniards to afford homes in places like Madrid and Barcelona.
The government aims to curb speculative investments that drive up property prices and make housing less affordable. Officials argue that the Golden Visa program attracts investors who purchase real estate only to resell or rent it out at inflated prices. Another reason for the cancellation is the government’s focus on social justice, with Prime Minister Sánchez emphasizing that policy should prioritize the needs of local citizens over wealthy foreign investors.
Current status of the program
The process of canceling the Golden Visa program is not immediate, as it requires significant changes to regulations and law. The timeline for revising the law and making these changes is uncertain. As of now, the political parties Sumar and Podemos, along with real estate agents and housing policy experts, have expressed support for ending the program.
Legal experts estimate that even under favorable conditions, the debate and cancellation process could take up to four months. A final decision on the program’s future might be delayed until 2025 unless unforeseen circumstances arise.
Impact of the program’s cancellation on the real estate market
The potential cancellation of Spain’s Golden Visa is expected to significantly reduce the value of high-end real estate, which could stabilize prices, particularly in areas where the market is currently overheated.
In the long term, this move could create a more stable and reliable real estate market, offering greater opportunities for local citizens to purchase homes. The market would be less influenced by foreign investors seeking residence permits through investment.
Alternatives to the Golden Visa
If the Golden Visa is canceled, foreign businesspeople will still have alternatives, such as investing in Spain’s business sector. The government continues to support economic growth through new company openings and job creation, which positively impacts Spain’s economic development.
Another option is investing in the rental sector, which ties into the government’s goal of making housing more affordable for Spaniards by regulating rental rates. This includes supporting construction projects aimed at increasing the supply of rental properties. These alternatives are currently under discussion within the Spanish government.
What Should Investors Do Now?
For now, the investor’s residence permit will remain valid as long as the foreign national meets all the conditions outlined in the program. If the property is sold or funds are withdrawn from Spanish accounts, the residence permit may be revoked.
While rumors about the complete cancellation of the Golden Visa persist, the program is still in effect, and the government continues to offer visas to investors from various countries.
Most experts agree that canceling the Golden Visa is a positive step that will help reduce speculative investments and make the real estate market more favorable for Spanish citizens.
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