"A mosaic showing the words- Golden visa in black and yellow "
By:
Mabel Fatokun

WHY: Spain Joins Other Countries To End Golden Visa Program

Spain

  • 48,592,909
  • 505,994 km2 (195,365 sq mi)
Spain

Spain is discontinuing the “golden visa” programme, which gave affluent foreigners the privilege of living in Spain if they invested in Spanish real estate. According to the government, the programme makes it more difficult for Spanish citizens to locate reasonably priced property.

The “Golden Visa” policy, which permits wealthy foreign investors to stay in Spain for an extended period of time if they make sizable financial contributions to Spanish real estate, is going to be terminated. Concerns that the scheme added to the skyrocketing cost of housing and its limited availability for Spanish-speaking individuals prompted the decision to make this change.

Some nations, including the Netherlands, Portugal, Ireland, and the UK, have either discontinued or drastically changed their golden policies. This pattern will probably keep happening if governments put real economic benefits ahead of just making money from investments.
In recent years, a number of nations have declared intentions to completely scrap or drastically alter their golden visa policies, which grant citizenship or residency in return for large sums of money.

The latest nations to adopt this trend are the UK, Ireland, Portugal, and the Netherlands, which has concerned affluent individuals searching for other ways to gain nationality through investments.

The decision to cancel or significantly overhaul golden visa programs stems from a combination of factors, including:

Money laundering and illicit activities: Golden visa programmes have drawn criticism for their ability to encourage criminal activity and money laundering since they may draw people who want to conceal their dubious activities or avoid financial laws.

Effect on housing affordability: Golden visa programmes have been held accountable for the escalation of housing costs, especially in affluent metropolitan regions. As a result, locals find it increasingly difficult to afford homes in their own cities.

Transparency and accountability issues: Programmes for golden visas have come under fire for lacking these qualities. Concerns have been raised regarding the due diligence procedures used to screen candidates and guarantee the validity of investments.

Focus shifting towards real entrepreneurs and innovation: Governments are increasingly attempting to draw in foreign investors who can make more significant contributions to their economies, such as generating employment, fostering innovation, and funding environmentally friendly initiatives.

Why is Spain discontinuing its Golden Visa initiative?

"A mosaic of the words -Golden Visa in yellow lettering"

To Pay Attention to Cheap Housing: Minister Pedro Sanchez: “Getting modest housing” will become a right instead of a privilege when the project is terminated.

Impact on Major Cities: The programme is believed to have made it more difficult for residents to locate cheap homes in major cities, where the housing market is already under pressure.

Details of the Spain Golden Visa Programme
The Golden Visa programme, launched in 2013, allowed non-EU nationals who invested at least €500,000 (about $541,250) in Spanish real estate without a mortgage to live there permanently.

Consequently, they were able to live and work in Spain for three years as they applied for permanent residency. Since the program’s inception, about 5,000 permits have been issued, with Chinese investors taking the lead.

Little Effect of the Programme on the Housing Market?
Although the programme is being discontinued, some analysts think it had little effect on the property market as a whole.

According to the real estate website Idealista, less than 0.1% of residences sold between 2013 and 2022 were bought using the Golden Visa programme.
They contend that the main reasons for Spain’s housing crisis are a shortage of available houses and rising demand.

Position of the European Commission Regarding Golden Visas Citing possible security risks, the European Commission has long argued in favour of discontinuing such initiatives.

Spain’s decision to discontinue its golden visa programme demonstrates how much importance it now places on enabling its citizens to become homeowners. Although the program’s overall market impact may be disputed, it does a good job of illustrating the difficult problems that European nations face when trying to strike a balance between the availability of inexpensive housing for people and economic benefits.

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