Spain, recognised as one of Europe's leading providers of residency by investment, commonly known as the ‘golden visa’, has decided to end the programme.

The official government announcement suggested that the programme, which allows foreigners to acquire a residence permit for investment, is being ended primarily to curb property speculation and reaffirm that housing should be considered a fundamental right, not just a speculative investment.

Background

On 9 April 2023, the Minister of Housing, Isabel Rodríguez, presented to the Spanish Government's Council of Ministers a balance sheet of the initiative, which was launched in 2013. Since its launch until 2023, Spain has issued 14,576 ‘golden visas’ linked to real estate investment, with the main beneficiaries being people from China, Russia, the United Kingdom, the United States, Ukraine, Iran, Venezuela and Mexico.

At the Council of Ministers meeting on 9 April 2024, ministers reached a consensus to end the practice of granting visas in exchange for the purchase of property valued at 500,000 euros or more. The minister reported a significant increase in the number of applications in the last two years: 2017 visas approved in 2022, 3273 visas approved in 2023. In the first ten months of 2024, the Spanish authorities granted a total of 780 golden visas, with an average investment per applicant of 657,204 euros.

During 2023, the government evaluated the possibility of increasing the minimum investment requirement to €1 million, rather than abolishing the golden visa programme altogether. However, the recent significant increase in home purchases to qualify for the programme prompted the government to take action, resulting in the complete abolition of the Golden Visa programme.

In popular cities such as Barcelona, Madrid, Malaga, the Balearic Islands, Alicante and Valencia, where 90 per cent of visas have been granted, housing prices have become unaffordable for local residents, especially young prospective buyers. The government, political actors and part of civil society claim that this price increase is a consequence of the Golden Visa programme, which allows non-EU citizens to obtain residency in Spain by buying a property for at least 500,000 euros.

In these cities with highly stressed real estate markets, it is almost impossible to find decent places to live for those who live and work there and pay their taxes every day,’ said Prime Minister Pedro Sánchez, adding that “his government will take the first steps to eliminate the Golden Visas, which have become the subject of national and international controversy and a thorny political issue”.

Today, 94 out of every 100 such visas are linked to real estate 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 their taxes there,’ said Pedro Sánchez.

The golden visa programme was established in 2013 during the government of Mariano Rajoy, who then led a conservative government. Since 2013, when the initiative was approved, citizens from China, the United States, Russia and the United Kingdom have been the biggest beneficiaries. They have acquired properties worth at least €500,000.

Sánchez also stated that ‘this is not the model of country we need, that of speculative investment in housing, because it is a model that leads us to disaster and, above all, to lacerating inequality’.

The Golden Visa programme was long seen as a means of attracting crucial foreign investment following the impact of the eurozone crisis, which hit Spain's real estate sector hard. But ending the programme would help make access to affordable housing ‘a right and not a speculative business’, said Pedro Sánchez.

The pressure to eliminate the programme is compounded by two other realities:

• Portugal, Greece and Ireland are some examples of countries that have already redesigned or ended the controversial programme.
• Strong opposition from European Union (EU) authorities, who have insisted that member states must end all golden visa programmes due to security threats and concerns about tax evasion, money laundering and corruption.

However, the end of the golden visa programme in Spain has also attracted a lot of criticism, especially from the upper classes. Their main argument is that the suspension will not have a significant impact on the availability of housing for the middle and lower classes.

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.

On 3 January 2025, the definitive suspension of the programme was published in the Official State Gazette (BOE) and will enter into force three months after its publication. According to the published decree, the Spanish authorities will stop accepting applications for ‘golden visas’ for investors as of April 2025.

Visas and authorisations for investors that are in force on the date of entry into force of this transitional provision will remain valid for the period for which they were issued,’ the document states. Furthermore, the document adds: ‘In the event that renewal applications are submitted, they shall be processed and resolved in accordance with the regulations in force on the date the initial authorisation was granted’.

In other words, the law includes a transitional clause to protect the visa of investors or their family members who applied before the entry into force of the new legislation. Visa renewals will be processed and decided according to the rules in force at the date of the original authorisation.

Therefore, after the vote in December 2024, the Spanish Congress of Deputies approved the abolition of the ‘Golden Visa’ programme and the publication of the new reform last January, foreign individuals interested in obtaining a residence permit in Spain through real estate investment will only be able to apply for it until 3 April 2025.

Conclusion

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

On 14 May, the Sumar parliamentary group presented a bill in the Spanish Congress of Deputies that would abolish the "golden visa" for foreigners who purchase a property worth more than 500,000 euros. Within this initiative, entitled "Bill to amend Law 14/2013, of 27 September, to support entrepreneurs and their internationalisation", it is proposed to amend Article 64 of the current law. Specifically, this article establishes the requirements that investors must meet in order to obtain a residence permit in Spain.

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.

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.