After several months of uncertainty, the Spanish Government has presented a new proposal to end the so-called Golden Visa as part of an effort to combat the high cost of housing. The proposal would completely eliminate not only the real estate option but also investment in company shares or government bonds.
Prime Minister Pedro Sánchez announced last April his intention to abolish this rule, which grants residency to non-European Union foreigners who invest a minimum of 500,000 euros in real estate. However, without specifying a concrete date or presenting any legislative proposals at the time, the immediate effect of the announcement was a sharp increase in demand for luxury homes connected to the Golden Visa.
Another element of uncertainty was added in May when the ruling coalition was forced to withdraw its proposed reform to the Land Law, a bill that included an amendment to end the “Golden Visa.”
This lack of progress, three months after the announcement, led political groups like Sumar to demand that the government move forward with the repeal of the Golden Visa, accusing it of «encouraging speculation, driving up housing prices, and putting pressure on certain areas.»
On the other hand, the government’s decision also faced various criticisms, with some arguing that the “Golden Visa” has nothing to do with the rise in housing prices. Among other things, they pointed out that it is more linked to luxury properties and accounts for less than 1% of real estate transactions nationwide.
Is the Second Time the Charm?
At the end of July, the government led by Pedro Sánchez decided to push again for the end of the Golden Visa, this time through an amendment to the organic law on efficiency measures in justice and consumer protection.
The legal initiative aims to completely eliminate the possibility of residency by investment: both the option to purchase real estate and to invest in Spanish public debt securities or shares in Spanish companies would be rendered null.
The debate on this amendment is expected to begin on September 9.
New Amendment, New Criticisms
The Spanish government’s renewed push to end the Golden Visa has reignited criticism of the measure, particularly from real estate sector figures who believe that eliminating the Golden Visa will have no impact on housing prices and sends a negative signal to foreign investors.
Others point to the international situation and suggest that up to half a million wealthy Venezuelans might choose Madrid as their new residence following the recent elections in the Caribbean nation. The end of the Golden Visa could jeopardize this and other opportunities for foreign investment.
Sociologist Kristin Surak, an expert on Golden Visa issues, believes it is possible that the visa’s elimination may never materialize. For her, this is «nothing more than an electoral measure and has such a small impact that it’s only relevant for votes,» adding that housing prices will not decrease due to the end of the “golden visas.”
What Is Our Recommendation?
As we have previously pointed out at AIM Global, the key is to remain calm. As long as there is no law, discussed by Parliament and officially enacted, the current regulations remain in force: from the minimum amounts to the investment options.
This means that if you have the resources and are interested in this opportunity, the time to invest is now. Don’t delay!
Furthermore, Golden Visas that are already in the process of being processed should not be affected by the new law, and it is likely that a transitional period will be established for these cases, including those most recently submitted.
Schedule a meeting with our team now and start your journey towards the Golden Visa. We will support you every step of the way and help you find options that match your investor profile.
