Spain will no longer hand out “golden visas” to foreigners willing to pay big bucks for them.
The Spanish government said on Monday that it plans to scrap a type of visa that allows non-European Union citizens to obtain residency permits after investing at least 500,000 euros, or $542,805, in real estate. About 10,000 such visas were issued since the program’s 2013 start, the Associated Press reported.
The exact details of the end to the golden visa program have not been ironed out, so it’s not yet clear what happens to those who already invested in or moved to Spain.
Visas for foreign investors, launched by European countries to fill budget holes after the global financial crisis, have been popular with people who want to move to countries with better political, cultural, or business climates. But governments like Spain that offered the visas now see them as a political risk, as affordable housing, especially for young people, becomes a top concern.
In the last year, Ireland, the Netherlands, Portugal, and Greece have all shut down or tightened their golden visa programs for similar reasons.
Spain’s reform comes as home prices become ever-more unaffordable, especially for young people struggling with high unemployment. The age at which young people leave their parents’ home in Spain rose to 30 years old last year, compared with the EU average of 26, according to the OECD.
Prime minister Pedro Sánchez said at a press conference on Monday that most of the property investment from foreigners has been concentrated in key Spanish cities like Barcelona, Madrid, and Valencia, which all face housing crunches.
In those cities, it’s “almost impossible to find decent housing for those who live and work there and pay their taxes every day,” Sánchez said on Monday. “This isn’t the model of the country that we want, it’s not the Spain that we want.”
Average Spanish rental prices have increased 40% in the last decade, while young people’s salaries have grown under 10%, per the OECD.
The country will continue to court foreigners through its digital nomad visa, which launched last year. That visa does not require investment, nor does it offer a path to citizenship.
Investment migration consultancy Henley & Partners said in 2023 that it saw more Americans inquire about residence and citizenship by investment than in any other year.
Portugal’s version, which was revamped last year to require foreigners to invest in areas outside of real estate, was the most common path for the firm’s US clients.
Such visas are also gaining popularity outside Europe.
In 2011, New Zealand granted citizenship to billionaire PayPal cofounder Peter Thiel, who had only spent 12 days in the country but made a series of local investments. In 2018, New Zealand banned foreigners from buying existing homes following a housing affordability crisis, similar to Spain and Portugal’s current situation.
Meghan Morris contributed to this report.
