Spain to End its Highly Popular Golden Visa Program

• Posted on Apr 10, 2024
• In Industry News, Spain

In a significant move aimed at curbing property speculation and ensuring housing affordability, the Spanish government has decided to end its Golden Visa program.

Introduced in 2013 by the conservative government, the Golden Visa attracted billions in foreign direct investment to Spain’s economy, enabling high-net-worth investors to obtain Spanish residency in return for an investment of €500,000 in real estate. A victim of its own success, the program has come under scrutiny in recent years for contributing to rising property prices, particularly in major cities like Barcelona, Madrid, and Malaga.

After a massively successful run – granting close to 14,600 Golden Visas primarily to citizens from China and Russia – Housing Minister Isabel Rodríguez announced the decision to end the program during a Cabinet meeting, citing concerns over its impact on local residents and the housing market.

The decision came just a day after Prime Minister Pedro Sánchez announced his intention to review the program, emphasizing the need to prioritize housing as a fundamental right for Spain’s citizens. Noting that the majority of Golden Visas were granted in areas with strained housing markets, the Prime Minister stated that it had grown difficult for residents to find affordable accommodation. The decision, therefore, underscores Spain’s commitment to addressing these issues and promoting inclusive growth.

This mirrors actions taken by Portugal and Greece in response to their own housing crises. However, Portugal only opted to modify the investment requirements and shift focus on higher education and job creation, while Greece chose to raise its minimum investment thresholds to combat the similar affordability issues faced by Spain.

While Golden Visas come and go, an end of a program has always been met with criticism as their economic benefits far outweigh the risks. By attracting foreign direct investment, they help bring in entrepreneurial talent and create jobs, stimulating economic growth and contributing to a nation’s financial stability. Ironically, Spain’s own Golden Visa was developed to tackle the eurozone crisis, which took a massive toll on the country’s real estate market as prices collapsed.

As Spain’s Golden Visa program comes to an end, there is no doubt that residency by investment programs are here to stay, whether as means for nations to foster economic growth or for individuals to expand their lives beyond borders. As Albert Einstein, a migrant himself once said, “energy cannot be created or destroyed, it can only be changed from one form to another.”