Spain Ends Golden Visa Program to Boost Housing Affordability

Spain is set to abolish its “Golden Visa” program, which grants residency rights to wealthy foreign investors who put large sums of money into Spanish property. This decision comes amid concerns that the program has contributed to rising housing costs and limited availability for Spanish residents.

Why is Spain scrapping the Golden Visa program?

Focus on Affordable Housing: Prime Minister Pedro Sanchez stated that ending the program will help ensure “access to affordable housing” becomes a right, not a privilege.

Impact on Major Cities: The program is seen as fueling an already stressed housing market in major cities, making it difficult for locals to find affordable housing.

Also Read: Spain Eases Rules for Foreigners with Temporary Residence Permits

Spain Golden Visa Program Details

Established in 2013, the Golden Visa program granted residency permits to non-EU citizens investing at least €500,000 (around $541,250) in Spanish real estate without a mortgage.

This allowed them to live and work in Spain for three years, with a path to permanent residency. Since its inception, nearly 5,000 permits have been issued, with Chinese investors leading the pack.

Limited Program Impact on the Housing Market?

While the program is being scrapped, some experts believe its impact on the overall housing market was minimal.

• Property website Idealista claims less than 0.1% of homes sold between 2013-2022 were purchased through the golden visa scheme.
• They argue that a lack of housing supply and surging demand are the primary causes of Spain’s housing issues.

Must Read: Why Are Many Countries Ending Their Golden Visa Programs? Reasons and Impact

Neighboring Portugal Takes a Different Approach

Portugal, another European nation with a golden visa program, recently revamped its Golden Visa program, excluding real estate investment as a path to residency. Instead, Portugal now focuses on attracting investment into funds to address housing crises more sustainably.

The European Commission’s Stance on Golden Visas

The European Commission has long advocated for an end to such programs, citing potential security concerns.

Spain’s decision to abolish its golden visa program reflects a growing focus on ensuring housing affordability for its citizens. While the program’s impact on the overall market might be debatable, it highlights the complex challenges European nations face in balancing economic benefits with housing accessibility for residents.