Spain to Scrap 'Golden Visa' Program

As the latest development unfolds, Spain is poised to abolish its widely popular ‘golden visa’ program. This scheme, which allowed foreign investors to secure residency by investing €500,000 in property, is set to be scrapped, as announced by Prime Minister Pedro Sanchez on Monday. The decision comes amidst Spain's efforts to address the pervasive issue of speculation that has been impacting many of its cities.

During a visit near Seville, Prime Minister Sanchez declared, "We will eliminate the so-called golden visa program, which grants residency in exchange for a €500,000 property investment." This move, scheduled for approval at Tuesday's cabinet meeting, is aimed at curbing speculative property investments that have been exacerbating housing accessibility challenges for numerous young individuals and families.

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Introduced in 2013 during economic difficulties to attract foreign capital, the program offers non-EU investors a three-year work and residency permit in exchange for investing a minimum of €500,000 in property or a Spanish company. Sanchez highlighted that a significant majority of these visas are currently tied to property investments, heavily concentrated in major cities such as Barcelona, Madrid, Malaga, Alicante, Valencia, and the Balearic Islands.

The Prime Minister underscored the intense pressures faced by the housing market in these regions, making it increasingly difficult for residents who live, work, and pay taxes to find suitable housing. According to reports, several southern European countries have also taken steps to either tighten regulations or discontinue similar visa schemes established during the financial crisis in response to escalating housing crises.

Portugal terminated its golden visa program in February 2023, which had contributed to significant inflation in housing prices, while Greece recently implemented stricter regulations, raising the required investment to as much as €800,000. Criticism surrounding such visa programs has been mounting, with many condemning them as a ‘European disgrace,’ arguing that residency permits should not be granted solely based on wealth.

In 2019, Brussels urged member states to clamp down on these schemes, citing concerns about their potential to facilitate corruption and money laundering, particularly benefiting affluent Chinese and Russian investors. The decision to abolish Spain's golden visa program reflects a broader European initiative to address the social and economic implications of such schemes.