Government amends judicial efficiency law to abolish the ‘Golden Visa’

The Government will take advantage of the processing of the organic law on efficiency measures in the justice system and consumer protection to introduce, through an amendment, the abolition of the 'Golden Visa' scheme. This scheme, which allows non-resident foreigners in the European Union to obtain residency by investing over €500,000 in property, was established in 2013 under the Popular Party (PP) government.

It also introduces another modification to this text so that homeowners' associations can decide whether to allow or veto tourist flats in their buildings.

The two amendments to the draft law on judicial efficiency and consumer protection, which Europa Press has reviewed, are being put forward by the PSOE to expedite the implementation of these housing measures.

One of the amendments, which as reported by El País seeks to abolish the ‘golden visa’ scheme, argues that this initiative, originally introduced to attract investment, has not significantly achieved its intended goals. The amendment contends that its removal "will not have adverse effects" on the economy, especially given the EU's trend towards tightening such measures.

Regarding tourist flats, the amendment proposed by the PSOE stipulates that any owner wishing to use their property for this purpose must first obtain explicit approval from the homeowners' association. Additionally, the association’s president has the authority to request the suspension of a property’s use as tourist accommodation if the owner does not have the required permit.

The PSOE justifies this amendment by pointing out that the rise in tourist flats has led to several negative effects, including disturbances to neighbours, fewer available residential rental properties, higher rents for permanent housing, and the “progressive gentrification of many neighbourhoods”. Consequently, the amendment grants neighbours – those most directly affected – the power to decide whether or not to approve tourist flats in their buildings.

Sumar urged to eliminate the Golden Visa

In April, the government announced its intention to abolish the ‘Golden Visa’, a move agreed upon by both the PSOE and Sumar, although the latter had been pressing for swift action and had even proposed a specific bill to achieve this.

Last week, Alberto Ibáñez, a member of the Compromís party within Sumar, called on the government to repeal these residence visas for foreigners who purchase properties worth more than €500,000 "as a matter of urgency", noting that over 100 days had passed since President Pedro Sánchez first announced the plan to abolish them.

This morning, Ibáñez, the housing spokesperson for the plurinational group, declared that the ‘Golden Visa’ is a "discriminatory" measure that encourages "property speculation". He welcomed the government’s response to his demands and accelerating its elimination.

However, regarding tourist flats, the minority member deemed the Ministry of Housing’s current plan insufficient. He has recently proposed an initiative calling for a tax increase, specifically advocating for a 21% VAT rate on tourist flats in the next General State Budget. This measure aims to make the activity less profitable and thereby encourage property owners to rent their properties for permanent residence instead.