Slow start for Spain’s golden visa scheme

Updated: Interest in Spain's controversial 'golden visa' scheme which grants Spanish residency to people who spend at least €500,000 ($620,000) on property in the country is still below expectations, real estate experts have told The Local.

Slow start for Spain's golden visa scheme
Some 324 people have invested €256.1 million ($318 million) in Spanish property the golden visa scheme to date. Photo of a beachside property: Shutterstock

A total of 324 people had signed up to the scheme up to end of the September, according to new figures from Spain's foreign ministry and published by Spain's 20 minutos newspaper.

That means around one person a day has signed on since the programme was launched in October 2013. 

The total value of that real estate investment was €256.1 million, the ministry said. 

As of May, the number of property buyers who has made use of the Golden Visa scheme was just 72, with Spain's national newspaper El País describing the Golden Visa scheme as a flop.

However, the new figures show there has been increased take-up since that time, even if this is limited.  

"The numbers are comparable with Portugal in the first year of their Golden Visa programme but given the current interest in Spanish property we believe that these numbers should increase significantly for the scheme to be classed as a success," Alex Vaughan, co-founder of property firm Lucas Fox told The Local.

He said he understood that official teething problems were now being addressed by the government , with a possibility that "tweaks" could be announced "by the end of the year". 

"We are continuing to see interest, primarily from the Middle East and Asia, " Vaughan told the Local.

"We continue to believe that, as in Portugal, the main interest will come from China but the numbers of applicants have so far failed to materialize."

The golden visa scheme — part of Spain's 2013 Entreprenuer's Law — gives foreigners who invest large sums in Spanish property, public debt and projects of general interest the right to reside in Spain.

For property investors, the minimum investment before taxes and changes is €500,000, although the real cost rises to around €600,000 once extra costs are factored in.

While the law doesn't give people the right to work in Spain, it gives non-EU citizens access to the entire Schengen area.

Aside from the 324 people who have been granted residency rights after purchasing property, a further 20 visas have been given to people investing capital in Spain to the tune of at least €1 million in shares of bank deposits, or €2 million in public debt.

In the case of those investments, people are granted a one-year visa, which is then extended to two years "as long as investment" is maintained, Spain's foreign ministry said.  

A further ten visas have been granted to be people setting up business projects considered of public interest in Spain.

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Spain to give young mid-income earners €250 monthly rental allowance 

Spain’s Prime Minister announced on Tuesday his government will launch a housing scheme whereby 18 to 35 year olds who earn below €23,725 gross per year will be able to get a monthly discount of €250 off their rent.

Spain to give young mid-income earners €250 monthly rental allowance 
The average Spaniard leaves the nest at 29.5 years of age. Photo: Gabriel Bouys/AFP

Spanish PM Pedro Sánchez made the announcement during an Urban Affairs Forum in the southern city of Seville, referring to it as a “special plan” aimed at ensuring the emancipation of young people in the country.

“We’re going to create a youth housing benefit of €250 per month for the next two years which will benefit young people between 18 and 35 years old with incomes below €23,725,” Sánchez stated, meaning that these tenants will be able to claim a maximum of €6,000 in total.

The most vulnerable families will receive extra state aid to cover “up to 40 percent” of their monthly rent.

The income limit of €23,725 gross earnings a year amounts to wages of around €1,500 net a month. 

According to a September survey by Spanish property engine Fotocasa, 62 percent of under 35s in Spain face financial obstacles when buying or renting a property.

“We’re going to allocate a public policy specifically to reduce the age of emancipation which is so unbearably high in our country, so that young people can have access to decent rental housing,” Spain’s PM explained. 

The average Spaniard leaves the nest at 29.5 years of age, the sixth latest bloomers in Europe, where the average age of emancipation is 26.2 years old.

Sánchez’s announcement comes just as the Spanish left-wing coalition government of PSOE and Unidas Podemos have agreed on Spain’s Housing Budget for 2022, although the new legislation still has to be approved by the Spanish Cabinet. 

This is likely to include new measures aimed at placing price caps on rentals in Spain, based on a price index put together by Spain’s Ministry of Transport and Urban Affairs.