The Spanish government has announced its intention to abolish the "Golden Visa" program through an amendment to a justice bill, set to take effect in January 2025. This measure, led by the PSOE party and its allies, aims to curb real estate speculation and address rising housing prices, which the government attributes in part to the influx of foreign investment in real estate under this program. While the elimination is still under parliamentary debate, it is expected that this reform will move quickly for implementation early next year.
What is the Golden Visa, and Why Is It Being Abolished?
The Golden Visa, or residence by investment, allows non-EU citizens to obtain residency in Spain by making a minimum investment of €500,000 in real estate. Alternatively, applicants may qualify by investing in public debt or company shares in Spain, each with its respective investment threshold.
Since its introduction in 2013, the program has been an effective tool to attract foreign investment, with over 15,000 visas issued. However, the left-leaning coalition led by Prime Minister Pedro Sánchez believes that this program has turned housing into a "speculative business" and negatively impacted local residents’ access to housing. In April 2023, the government reaffirmed its intentions to end the Golden Visa real estate investment route, and as of July, it has been pushing this initiative through parliament.
What Changes Will the New Reform Bring?
The proposed amendment to the justice law will remove key articles from Law 14/2013, which outlines the qualification requirements for the Golden Visa. This will not only affect the real estate pathway but also other investment options, such as the €2 million public debt investment and the €1 million threshold for Spanish company shares or bank deposits.
The reform includes a transitional provision that will allow any applications submitted before the law takes effect to be processed under existing rules. This means that those interested in obtaining Spanish residency through the Golden Visa have until the end of 2024 to apply and qualify under current regulations.
Reactions from Investors and Opposition
This change has sparked mixed reactions among investors and opposition parties. Parties such as the Partido Popular and Vox have expressed opposition to the measure, suggesting it could deter future investment and impact the local economy. Meanwhile, investors interested in the Golden Visa are rushing to submit applications before the program closes.
Attorney Krista Victorio from Orience anticipates a surge in applications over the coming months, noting that any legislative changes should ensure legal security and not apply retroactively.
A European Contrast
While Spain, Portugal, Ireland, and the Netherlands have either eliminated or reduced their Golden Visa programs, Hungary has reintroduced its residency-by-investment scheme in 2024, offering options through real estate investment funds, residential properties, or donations to educational institutions. This contrast highlights the varied approaches in Europe regarding foreign investment and economic security.
Conclusion
While Spain is moving towards ending the Golden Visa, there are still opportunities for investors looking to secure residency in the country before the new law takes effect in January 2025. Real estate investment remains a viable route until the end of the year, and those who complete their applications on time will be able to benefit from this program under the current rules.
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