Spanish Government to end 'Golden Visas' for investing in housing

The President of the Government, Pedro Sánchez, has announced that the next Council of Ministers this Tuesday will address removing the Golden Visa for foreigners who invest more than €500,000 in properties.

During an event on housing in Dos Hermanas (Seville), Pedro Sánchez explained that the Council of Ministers will study a report submitted by the Minister of Housing and Urban Agenda, Isabel Rodríguez, to modify the Law approved by the PP Government in 2013, "which allows you to obtain a residence visa if you invest in housing".

"We are going to start the procedure to remove the so-called 'Golden Visa', which gives investors access to residence status when they invest more than half a million euros in real estate," said Sánchez, who pointed out that the aim is to "guarantee that housing is a right and not just a speculative business".

He explained that around 94% of visas for investors are linked to real estate investments (around 10,000 authorisations), and cities such as Barcelona, Madrid, Malaga, Alicante, Palma and Valencia are the most in demand for this type of operation, coinciding in also being the "most stressed" areas.

The President has guaranteed that the government's priority in this legislature is to guarantee access to affordable housing, to respond to citizens' needs and that no citizen should have to spend more than 30% of their income to have a decent, adequate and quality home. Consequently, priority is being given to housing's social function, he pointed out.

For Francisco Iñareta, spokesperson for idealista, "the announced measure will have no impact on the real estate market. According to the latest official data, between 2013 and 2022, less than 5,000 of such residence permits were granted in Spain, which is less than 0.1% of the 4.5 million homes sold in the same period. Purchases by non-EU foreigners have not led to any conflict in Spain. Spain's housing problem – both for sale and rent – is not caused by golden visas but by the increasing lack of supply and the exponential increase in demand. The measure announced today, which focuses on international buyers rather than encouraging new housing to come onto the market, is yet another misdiagnosis. It will change anything because, in reality, the golden visas never made any difference."

More than 4,000 homes worth over €500,000 bought by non-EU nationals by 2023

According to data from the Real Estate Yearbook of the Property Registrars, 9.7% of purchases by foreigners in 2023 were for over €500,000. Of the more than 87,000 transactions carried out by foreigners last year, more than 8,400 were for that amount or more.

Of these transactions, 49.6% corresponded to EU citizens and 50.4% to non-EU citizens, which means more than 4,200 transactions were by foreigners who obtained a residency permit for real estate investment.

According to the Registrars, this type of non-EU buyers increased their weight by 8.13 percentage points over the last year. In any case, obtaining the 'golden visa' for real estate investments of over €500,000, which could perfectly well be two homes of €250,000, for example, which would not be included in this section.

Of the purchases made by foreigners in each autonomous community, the Balearic Islands (31.7%), Madrid (19.6%), Andalusia (15%) and Catalonia (12.6%) – regions with already normally high prices – saw the highest number of purchases of over €500,000. These percentages translate into approximately 1,400 transactions in the Balearic Islands, 870 in Madrid, 2,600 in Andalusia and 1,800 in Catalonia.

But while in Madrid and Catalonia, most of these purchases for over €500,000 were made by non-EU foreigners, with 73% and 63%, respectively, they were below 50% in Andalusia (48%) and the Balearic Islands (31.7%). In short, of the 4,200 home purchases by non-EU foreigners in Spain in 2023, around 1,200 were in Andalusia, more than 1,100 in Catalonia, and just over 600 in Madrid and 450 in the Balearic Islands.

In the Valencian Community, although the weight of purchases over this amount barely represented 4% of the total (some 1,100 homes), this is a small volume for the leading community in terms of purchases by foreigners. Forty-five per cent of these purchases were by non-EU nationals, representing just over 500 properties.

Sumar celebrates the end of the 'Golden Visa'

Sumar's economic spokesperson in Congress, Carlos Martín Urriza, has welcomed the fact that the government is going to remove residence visas for foreigners who buy properties worth over €500,000, known as the 'Golden Visa', and has called to prohibit buying property that is not intended to be lived in.

"It should be followed up by banning people from being able to buy a house they do not intend to live in, like in Canada and Amsterdam," Martín Urriza said in a post on the social network X, formerly known as Twitter.

It is worth remembering that the Canadian government banned foreign investors from buying homes in the country until 2027 to combat problems in accessing a home. For its part, the Amsterdam city council agreed in 2021 to limit investing in rental housing for properties of less than €500,000.

Martín Urriza, who described the announcement as "good news", also took advantage of the post to point out that the proposal end to the 'Golden Visa' comes from Sumar.

In the last legislature, Más País, the party led by Íñigo Errejón, who is now the spokesperson for Sumar in Congress, presented a bill to end this visa and also tried to remove it through an amendment to the Housing Law, but it did not succeed in either case.

Although later the government, through minister José Luis Escrivá, began to look into modifying and even removing this visa, it was not until 8 April that the President of the Government, Pedro Sánchez, announced that this week's Council of Ministers would begin the procedure to remove the 'Golden Visa', which was approved in 2013 under the administration of Mariano Rajoy.

"Housing is a constitutional right and not merely a speculative business. That is why we are going to remove the 'Golden Visa', the law passed by the PP that allows investors to obtain a residency visa if they invest over €500,000 in a property in our country," Sánchez stressed in a post on X.

According to data from the Executive, around 94% of the 'Golden Visas' are linked to real estate investments (around 10,000 authorisations) and in cities like Barcelona, Madrid, Malaga, Alicante, Palma and Valencia, which are under stress due to high housing prices, this type of operation is the most in demand.