Spain axes ‘golden visa’ scheme to curb property speculation

Spain is to axe its so-called “golden visa” scheme under which foreign investors get residency for a 500,000-euro-investment in property, to curb the speculation blighting many Spanish cities, Prime Minister Pedro Sanchez said on Monday.

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 euros in property,” Sanchez said 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 euros ($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.

In February 2023, Portugal ended its golden visa programme which had significantly pushed up house prices, and late last month, Greece tightened the rules on its own scheme, raising the required investment to as much as 800,000 euros.

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, saying they largely benefited wealthy Chinese and Russian investors, and warned that the practise was likely to facilitate corruption and money laundering.

Greece and Cyprus broadened their “golden visa” scheme for foreign investors during the years of the financial crisis resulting in higher rent, lack of housing in the central suburbs , while buying a home has become unaffordable for locals.

Source: AFP