On Monday April 9th, Spanish Prime Minister Pedro Sánchez announced that his government plans to get rid of the golden visa scheme which can grant non-EU nationals residency in Spain when they buy real estate worth €500,000.
Described as a "European disgrace…which creates first and second-class citizens" by Spain’s Culture Minister, the golden visa has become increasingly questioned by the EU and eliminated or amended by a number of European countries in recent years.
Sánchez's reasoning is the impact golden visas are having on Spain’s property market, stating that "we are going to take the necessary measures to guarantee that housing is a right and not a mere speculative business" and thus "begin the procedure to eliminate the granting of the so-called golden visa".
Over the following three months, Spain's left-wing government struggled to pass legislation that legally cancel the golden visa.
Now in mid-July 2024, it believes it has found a loophole that will allow them to officially get rid of the scheme.
EXPLAINED: How Spain has found a way to officially axe its golden visa
Not only that, Spanish authorities have finally decided to eliminate all types of golden visas. Initially, the intention was to only scrap the property-based one, but now the plan is to axe all golden visas, including the investment options.
What rights are foreigners in Spain losing with the elimination of the golden visa?
The end of the golden visa means there will now be one less visa available to third country nationals such as Brits and Americans who want to move to Spain, albeit a visa option only up for grabs for a lucky few. In essence, non-EU nationals have lost a residency option for moving to Spain.
It also means that there is no longer a visa scheme in Spain which does not require holders to become tax residents or actually live in Spain (one day a year in Spain to renew the visa was enough to not lose residency rights).
Furthermore, non-resident second-home owners with properties in Spain worth €500,000+ will no longer have the option of becoming Spanish residents by using their Spanish property/ies as the 'hook' (the golden visa was retroactive).
The other ways of accessing the golden visa - investing €1 million in shares in Spanish companies, or €2 million in government bonds, or transferring €1 million to a Spanish bank account - will not be available either, according to latest proposed amendment.
Admittedly, such fast-track ways to Spanish residency were only available to the approximately 15,000 wealthy people who obtained the golden visa over the past decade (as well as their family members).
Therefore, the average foreigner residing in Spain will not be affected by the removal of the golden visa.
Will foreigners on the golden visa need to change to another Spanish visa?
As the in-detail law has not yet been published or approved, it is not yet clear whether foreigners currently on Spain’s golden visa will be allowed to hold onto the scheme or offered the option of Spanish residency through an alternative means.
However, over the past three months, countless law firms have assured their clients that the golden visa cancellation will not be retroactive, and that those currently processing their golden visas are not at risk of having their applications denied.
The most obvious alternative to the golden visa - given that it is also suitable for non-EU citizens with plenty of savings - is the non-lucrative visa (NLV). However, the NLV doesn’t allow people to work, something the golden visa has offered.
In this sense, the newer digital nomad visa, which includes the requirement of €2,646 in monthly earnings to be eligible, may be a better choice for some people on the golden visa or those considering applying for it.
It is currently possible to change visas in Spain for certain situations such as work or study.
READ MORE: 'There are three main alternatives to Spain's golden visa'
Will the Spanish government take any further action against foreign visas and property ownership?
Spain’s ever-growing popularity among foreigners has been making headlines, not for positive reasons unfortunately and rather due to the impact it’s having on the country’s housing crisis.
The proliferation of Airbnbs or other short-term holiday lets in city centres across the country, which are increasing rent prices and reducing the stock available to locals, has led to protests against mass tourism and its consequences in many cities and holiday hotspots across Spain.
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The record number of foreigners buying homes as well, helping to keep prices high at a time when Spaniards are not buying due to high interest rates on mortgages, has also led to calls for non-residents to be banned from buying properties in Spain.
In the end, Spain’s PM has decided to appease public outcry by targeting the 15,000 wealthy foreigners on golden visas, arguing that 94 percent of them have homes in “stressed real estate markets”.
It showcases that Spain is willing to introduce measures that can act against the interests of foreigners (wealthy ones in this case), although as the Socialist government stressed in March, they have no plans to prevent foreigners from buying homes in Spain.
At present, the government is focusing primarily on trying to rein in its exploding short-term rental market, with a planned ban on seasonal housing, charging the owners of these tourist apartments VAT and handing out stiff fines for illegal ads, giving communities of owners the right to decide whether to allow Airbnbs in their buildings and other similar measures. Barcelona's mayor is even planning to ban all tourist rental flats by 2028.
It also seems unlikely that in the current climate of apparent animosity towards tourists in stressed housing and rental areas, the Spanish government will not want to further tarnish Spain's image abroad by preventing foreigners from buying property in Spain, even if they're non-residents.
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