Spain axes ‘golden visa’ scheme to curb property speculation
- Spain residency scheme introduced in 2013 was popular with wealthy Chinese and Russian applicants
- Soaring house prices have become a major problem for many Spaniards, particularly in major cities
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Spain is to axe its so-called “golden visa” scheme under which foreign investors get residency for a €500,000 investment in property, to curb the speculation blighting many Spanish cities, Prime Minister Pedro Sanchez said.
The government is going to “do away with the so-called golden visa scheme that allows access to residency in exchange for investing €500,000 in property,” Sanchez said on Monday while visiting an area near the southern city of Seville.
The move, which will be approved at Tuesday’s cabinet meeting, will allow the government to fight against “speculative investment” in property, which is preventing “many young people and families” from accessing housing, he said.
The scheme - which was introduced in 2013 when the economy was struggling and Spain wanted to attract foreign capital - offers non-EU investors a three-year work and residency permit in exchange for investing at least €500,000 (US$542,000) in property or a Spanish company.
“Today, 94 out of every hundred visas of this nature are linked to property investment that is concentrated in large cities,” he said, pointing to Barcelona, Madrid, Malaga and Alicante in the south, Valencia in the east and Spain’s Mediterranean Balearic Islands.
Such areas were experiencing “a lot of tension in the housing market, making it nearly impossible for those living, working and paying taxes there to find decent housing,” Sanchez said.
In recent months, several countries in southern Europe that set up similar schemes during the financial crisis, have tightened the rules or dropped the offer altogether to ease their respective housing crises.
These visas are “a European disgrace. You can’t grant someone a residency permit just because he’s a millionaire”, said Culture Minister Ernest Urtasun who is also the spokesman for the radical leftwing Sumar party, part of Spain’s Socialist-led ruling coalition.
In 2019, Brussels urged member states to crack down on such schemes and warned that the practise was likely to facilitate corruption and money laundering.
From the start of the golden visa scheme in 2013 until November 2022, Spain issued almost 5,000 permits, government figures show.
Chinese investors top the list followed by Russians who invested more than €3.4 billion, according to a 2023 Transparency International report that questioned whether authorities investigated the origin of the funds.
Additional reporting by Reuters
