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Pros and cons: What foreigners should be aware of before applying for Spain’s golden visa

Spain’s golden visa offers non-EU citizens the possibility to live in Spain. However, if you're thinking about applying and investing a sizeable amount, there are some key points to consider before deciding if it’s right for you.

Pros and cons: What foreigners should be aware of before applying for Spain's golden visa
Pros and cons for Spain's golden visa. Image: falco / Pixabay

Spain’s golden visa, sometimes referred to as an investor visa, allows non-EU citizens the right to live in Spain if they meet several requirements.

These include buying a property worth over €500,000, investing €1 million in a Spanish company or having €1 million in a Spanish bank account.

Since the scheme was launched in 2013, the number of third country nationals applying has risen every year.

In 2019, Spain issued this visa to a record 8,000 non-EU nationals, with Chinese, Russian, Indian and American investors making up the majority of applications.  

Due to Brexit, the golden visa is also one of the easiest ways that British citizens can now legally move to Spain from 2021 onwards, providing they have a lot of cash to be able to do so. 

It’s a sizeable investment for even those earning six figures every year, so before you decide whether this is the best visa or residency option for you, here is an important list of advantages and disadvantages that come with Spain’s visado dorado (golden visa). 

Pros:

  • Your family can be included on the visa
    Your spouse/partner, any children under 18 and dependent parents can also be beneficiaries of the visa and will be allowed to live in Spain with you.
  • The golden visa can be a pathway to citizenship if you live in Spain for 10 years
    The golden visa is issued for an initial period of one year, but once you’re in Spain you can apply for a residency permit for a further two years. Once this time is up, you can apply to stay for another five years. After five years, you will be eligible for permanent residency and after 10 years of residing in Spain, you will be able to apply for Spanish citizenship.
  • You and your family will be allowed to work in Spain
    The golden visa allows you and your dependents (if of legal age) to be able to get a job and work in Spain, providing local requirements are met.
  • You don’t need to live in Spain or be a tax resident here
    Getting the golden visa doesn’t mean you have to reside in Spain or spend a certain amount of time here in order to renew it. This means that you don’t have become a tax resident. The only requirement is to visit once a year to renew your permit.
  • It enables you to have freedom of movement throughout the Schengen zone
    The golden visa will allow you and your family visa-free travel throughout the Schengen area’s 26 countries.  
  • You don’t have to be physically in Spain to apply for it, but can be if you want
    You don’t have to travel to Spain to apply for the golden visa – everything can be done online or through immigration lawyers here in Spain. If you are in Spain at the time and want to apply for it, the good news is that you won’t have to leave the country before doing so. The whole process is relatively quick too. According to the Spanish government website, it will be processed within 20 working days.
  • You can buy several properties which add up to €500,000
    One option for the visa is to buy a property for €500,000 or more, but you are not required to spend it all on one property. You will still be eligible for the visa if you buy multiple properties, as long as the total amount adds up to more than €500,000.
  • The golden visa is retroactive
    This means that if you already bought a property in Spain worth over €500,000 after 2014, but didn’t apply for a golden visa at the time, it’s still possible to do it now.
  • The property can be sold once you have obtained permanent residency
    Once you have lived in Spain for more than five years and have obtained permanent residency, you are able to sell the property without forfeiting your right to reside in Spain.

Cons:

  • You need to have a lot of money and cannot use a mortgage loan or financing for your investments
    As mentioned above, to apply for the golden visa, you must have a fair amount of savings. This means investing at least €500,000 in real estate, buying shares in a Spanish company worth €1 million or having €1 million in a Spanish bank account. This cannot be done through a mortgage company or a loan, and must be from your own pocket.
  • There are cheaper golden visas in Europe
    To apply for Greece’s golden visa, you need to spend €250,000 on a property, for Malta it’s €270,000 and for Portugal it’s currently €280,000 (all of which are subject to their own conditions and regular changes).

  • You are not automatically eligible for Spain’s public health care system
    In order to apply for the golden visa, the Spanish government requires you to have private health insurance. This means that you will not automatically be eligible for the free public health care system. You may be able to benefit from this later if you get a job or become self-employed and start paying into the social security system.

  • The property has to be in one person’s name 
    If you bought a property worth €500,000, but it has you and your spouse’s name on the deeds as joint owners, then you will not be able to apply for the golden visa because you will only have €250,000 in your name. All €500,000 or more must be in one person’s name. 

  • Initially, the golden visa is only valid for one year
    When you first apply for the golden visa, you will not be granted the right to live in Spain permanently right away. You are able to exchange it for a residence permit, valid for a further two years once you’re in Spain though, and then get permanent residency after five years. 
  • You will be liable to pay property taxes on top of the €500,000
    If you are applying for the golden visa by investing in a property, you will also need to pay VAT, transfer tax and stamp duty (known as AJD in Spain) on top of the cost of the house.
  • You will be liable to pay non-resident tax on your property
    If you choose not to live in Spain, even if you don’t rent your property out, you will still be liable to pay non-resident tax on it. This will be roughly 24 percent.  
  • You may have to pay wealth tax
    Whether you decide to become a resident of Spain or not, if you get the golden visa or buy property here, you will be liable to pay wealth tax on all your worldwide assets, if they add up to more than €700.000. This includes being taxed on things such as life insurance plans, jewellery, yachts, art and antiquities. If you’re a resident in Spain, however, you will have a €300,000 tax allowance on your place of permanent residence. The percentage you are charged depends on whether you are a resident in Spain or not, but it’s typically between 2 and 2.5 percent.

  • You have to prove financial means as well

    Apart from the €500K investment in a Spanish property, you also have to prove you have sufficient financial means or income to cover your costs and your family’s. The standard financial requirement for golden visa applicants is 400 percent of the IPREM: €2,259 (£1,952) per month.

    So for a non-EU national wanting to apply for residency for himself alone through a golden visa, the amount they need to prove per year is €27,115. The permit generally lasts two years so that amounts to €54,230.

    For every family member included in the residency application it’s an extra 100 percent of the IPREM, so you need to prove you have €6,778 per year for each person, €13,556 for the two years the residency permit lasts.

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PROPERTY

Ten ways under-35s in Spain can get help to buy a home

Buying a home is particularly difficult for young people in Spain, with low wages, job instability and rising property prices making it a pipe dream for most. But there are several schemes throughout Spain to help make it a reality.

Ten ways under-35s in Spain can get help to buy a home

Many young people in Spain who can afford to move out of their parent’s house cannot yet afford to buy their own home, with down payments and securing a mortgage two of the biggest problems.

According to FotoCasa six in 10 young people in Spain between the ages of 18 and 34 have tried to buy a property, but without success.

The Emancipation Observatory of the Spanish Youth Council (CJE) adds that currently in Spain 59.2 percent of young people rent, while only 17.4 percent own their own property and pay a mortgage. Data shows that most Spaniards aren’t able to buy their own property until they are 41 years old. 

Luckily there are now several government schemes across the country that aim to help young people get on the property ladder. Here are 10 ways that under-35s can get help to buy their first home.

Buying a home in a rural location

The Spanish government introduced a subsidy of €10,800 for those under 35 who wish to purchase a property in towns or villages with less than 10,000 inhabitants, in a bid to help solve the problem of declining rural populations, as well as the issue of young people not being able to afford to buy a home. This is available until December 2022 and can be applied for through the authorities in your region. 

Andalusia

Andalusia announced its ‘First Home Programme’ earlier this year, which is independent but runs parallel to the State Housing Plan. It includes aid of up to €10,800 for the acquisition of habitual residence for young people under 35.

Castilla y León

Those in Castilla y León can apply for aid if they want to live in the province of Soria. Aid is available up to 50 percent, up to a maximum of €5,000 to buy in rural areas within the province. People up to the age of 36 can apply. Find out more on how to apply here

Canary Islands

Young people from the Canary Islands can apply for a housing benefit in 2022 of 20 percent of the cost of the property up to a maximum of €11,000. You are eligible up until the age of 36. Find out more about the aid here

Galicia

Galicia is giving assistance to those wanting to buy in the historic centres of towns and cities. Those aged 35 and under can get up to €12,800 to help them do this, which in turn will help to revive and rejuvenate the oldest parts of the region. You need to apply here before November 15th in order to be in with a chance. 

Madrid

In July 2022, the government of Madrid announced an aid package for young people aged 35 and under. The banks, along with the government of Madrid, will grant mortgage loans for amounts greater than 80 percent and up to 95 percent of the value of the property, provided that the purchase price doesn’t exceed €390,000.

READ ALSO: Why Madrid is now the easiest place in Spain for under-35s to buy their first home

Murcia

The government of Murcia guarantees an aid package of 20 percent, up to €10,850 for those up to the age of 35 who want to buy their own home by getting a mortgage loan. Find out more and apply for the aid here

Valencia region

In Spain’s Valencia region, the Ministry of Housing and Bioclimatic Architecture aims to help make it possible for young people to buy a home who might not otherwise be able to, as well as help towns and villages that are at risk from de-population. The amount each applicant can get will be 20 percent of the value of the price of a house, up to a maximum of €10,800 per person. The cost of the property cannot exceed €120,000 and it must be your main and permanent home. It is available to those up to the age of 35.

READ ALSO: How young people in Spain’s Valencia region can get €10k to buy a home

Aid for large families

Large families or familias numerosas as they are called in Spanish are defined as families who have four or more children. Large families can also benefit from state aid when buying a property, which is €10,800 as long as it does not exceed 20 percent of the property price. When buying a property, these families can also get help by benefiting from a discount on the payment of the Property Transfer Tax (ITP), up to four percent on second-hand purchases. 

Aid for renting

If you can’t yet afford to buy your own property, there are several benefit schemes for young people to be able to move out of their parent’s home and be able to rent instead. The Bono Alquiler Joven allows those between 18 and 35 to get €250 per month to go towards rent and is available across the country. There are various other schemes in different regions too. Find out more and apply here

Be aware, most of these schemes are only available for certain amounts of time and strictly for those who do not already own a property. There may also be prerequisites on the amount of time you have lived in each region. For example, those wanting to benefit from the aid package in Madrid must have lived in the region for the two years leading up to their application.

There are also certain limits as to the amount you can earn in order to be eligible for the benefit. In Valencia, your income must be equal to or less than three times the IPREM (€6984.24 per year for 2022).

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