On the 9th of April 2024, the Spanish government announced their intentions to abolish their Golden Visa programme for foreign property investors.
The programme launched back in 2013, and allowed non-EU citizens to gain Spanish residency by investing in property worth at least €500,000 without a mortgage.
Between then and November 2022, approximately 5,000 of these visas were issued – mostly to Chinese and Russian investors, who helped boost the Spanish real estate economy by a whopping €3.4 billion.
However, 94% of international real estate investments are tied to major cities – such as Madrid, Barcelona, Ibiza, and the Balearic Islands – that are struggling with housing shortages, which has led current Prime Minister, Pedro Sánchez, to phase out this scheme.
But what does this mean for foreign property investors, and how can non-EU citizens gain Spanish residency once the golden visa has been phased out?
Continue reading to find out everything you need to know.
Why is the Spanish golden visa scheme being scrapped?
The main reason why the Spanish government has decided to scrap their golden visa scheme is because of housing shortages and soaring property prices across the country.
Spanish Minister for Housing, Isabel Rodríguez, said that eliminating the golden visa scheme will be a key step in increasing the availability and affordability of housing for Spanish nationals.
Spain has also been under immense pressure from the European Commission, which wants to clamp down on golden visas and similar residency schemes due to growing security concerns.
Will the changes work?
For advocates of affordable housing, this announcement was music to the ears.
However, many have raised doubts about how effective getting rid of the golden visa scheme will be in helping Spain achieve the above goals.
For example, real estate specialists have highlighted that international property investors have actually had a small impact on Spain’s housing market, with less than 0.1% of the homes sold since 2013 linked to golden visas.
Instead, experts believe the problem stems from rapid growth in demand and increasing shortages of available homes, rather than from the Spanish golden visa scheme.
Some have even argued that axing the scheme will deter the foreign investment the country needs for new residential construction to increase supply and reduce property prices.
Who will the proposed changes affect?
Previous or current golden visa applicants don’t need to worry about the proposed changes having an impact on their investment.
However, non-EU nationals will no longer be able to gain Spanish residency simply by purchasing a high-value property.
This may sound like bad news for UK residents who no longer have freedom of movement around the EU, but there are plenty of other options available that allow those who intend to retire in Spain to live there most of the year.
Is there an alternative for non-EU citizens to gain Spanish residency?
Only the real estate investment option is being withdrawn from Spain’s golden visa scheme, and you should still be able to invest in shares and government bonds, among other things.
If you’re still looking to gain Spanish residency, there are alternative visas that you can look into.
Including the Spanish non-lucrative residency visa programme.
This visa allows you to legally live in Spain and apply for a one-year residency permit, which you can later extend for up to four more years as you continue to meet the Spanish residency requirements.
Until this point, however, it’s important to note that this is a non-working visa, which means that you can reside in Span, but not carry out any economic activity.
Once you’ve lived continuously in Spain for five years, you’ll be eligible to request a permanent residency permit, which will be valid for ten years.
Need expert advice?
If you’re worried about these changes and what they mean for you as a potential international property investor in Spain, or would like to find out more about the alternative pathways to Spanish residency, the experts at Fluent Finance Abroad are here for you.
With decades of experience, we’re the go-to team whenever you need help and advice securing Spanish residency.
Give us a call today on 0034 952 85 36 47 or email us at info@fluentfinanceabroad.com and we’ll be in touch to answer your questions as soon as possible.
