Golden visas are becoming increasingly scrutinised across Europe.
The Netherlands is the latest country to announce it will scrap the visa aimed at wealthy third country nationals in 2024.
In recent months, Portugal, Ireland, Greece and Malta have all either scrapped the equivalent of their golden visas or made the conditions much harder for millionaires who want to make a real estate investment.
These decisions come after years of warnings by the EU that such foreign investment residency deals are a risk to security, transparency and the bloc’s values. The European Commission also asked EU partners to stop granting them in early 2023.
This was highlighted in 2022 by the joint ban of golden visa applications by Russian tycoons looking to flee to Europe following their government's invasion of Ukraine.
In Spain, there have also been calls to limit the golden visa that gives residency rights to wealthy non-EU nationals and which allows them to access Spanish citizenship after ten years without having actually lived in the country.
Last May, we reported how real estate experts and lawmakers believed that the €500,000 threshold was insufficient, especially in Spain’s main cities, where many homes cost this amount, and therefore half a million can no longer be considered a price tag for luxury properties.
Furthermore, they argued that these visas only end up driving up prices and kicking residents out of their neighbourhoods.
READ ALSO: What foreigners should be aware of before applying for Spain's golden visa
Earlier in the year, Spanish political party Más País lodged a legal proposal at the Spanish Parliament calling for Spain’s golden visa scheme to be abandoned.
Their spokesperson Íñigo Errejón voiced the same reasons as those given by the Portuguese government’s reason for scrapping the scheme - put an end to or at least lessen property speculation in Spain.
A neighbourhood association in Barcelona (Favb) even called for the Catalan capital’s property market to be off limits for golden visa property hunters.
There have been no changes to Spain’s golden visa as of December 2023, with a meeting between Spain’s Social Security Ministry and the Ministry of Economic Affairs not materialising into a decision on the matter.
But now the ruling Socialists’ junior partner in Sánchez’s new government has put the issue back on the table for 2024.
Hard-left coalition group Sumar is made up of several left-wing Spanish parties, and their leader Yolanda Díaz is the second Deputy Prime Minister of Spain and the country’s Labour Minister.
On December 14th, Sumar presented a bipartisan agreement in the Spanish Parliament which aims to address some of the pressing issues affecting the country’s tourism and housing sectors.
Both industries are intrinsically linked due to the fact that the proliferation of short-stay holiday lets in Spain have been pinpointed as one of the chief reasons for rising rents and property prices.
Compromís MP Alberto Ibáñez, part of the Sumar coalition, has explained that the objective of the pact is a more sustainable tourism model that respects labour rights, cities and housing, including measures such as limiting the number of cruise ships, banning short-haul domestic flights and, last but not least, cancelling golden visas.
Since Spain's golden visas came into force, around 11,500 have been granted, along with another 20,000 authorisations for family reunification.
Ibáñez has pointed out that in the Valencian province of Alicante almost one in every two properties that have been purchased recently have been by non-residents, normally so-called “vulture funds” or “very rich people”.
In this context, Sumar’s proposal is to stop issuing golden visas to foreigners.
Even though rising interest rates in 2023 has seen a drop in mortgage applications among Spaniards, house sales to foreigners have represented a far higher percentage of the total than ever - 21 percent (67,883 in the first half of 2023) - seen by real estate experts as one of the reasons why the property market is being propped up and prices kept high.
READ ALSO: Foreigners are paying more than ever for property in Spain
So far the government’s main solution to address the lack of affordable housing in Spain has been to build up to 160,000 social housing units in the coming years, not an immediate solution to the lack of affordable properties to buy or rent
There’s been mountain pressure at a regional and city level to ban or limit short-holiday lets, but millionaire foreign property buyers have not yet been singled out by Pedro Sánchez as a cause of Spain’s housing crisis.
With 31 out of 350 seats in the Spanish Parliament, Sumar will not be able to scrap Spain’s golden visa scheme without the support of Sánchez’s PSOE (121 seats) and other smaller parties that will give any possible legislation an absolute majority.
At this point, further pressure from the EU appears to be a more likely instigator for the ruling Socialists to pay attention to Sumar’s demands.
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