Why Spain is Putting its Brakes inGolden Visa Scheme like Portugal, Ireland, and the Netherlands? Is this To Limit Tourists from China, Russia, UK and US ?
Spain’s plan to abolish its Golden Visa programme has hit a significant roadblock. While the country’s Congress had previously approved a bill to eliminate the scheme, the Senate vetoed it on 2 December 2024, sending it back for further review. This unexpected move has delayed the anticipated ban, initially expected to take effect in early 2025.
However, the veto does not mean the ban is off the table. Spain’s Congress has the power to override the Senate’s decision, and it could push the ban through during its next plenary session. Analysts predict that if passed, the final implementation could happen by April 1, 2025.
The Golden Visa programme, which allows non-EU citizens to acquire residency through investment, has faced criticism for driving up real estate prices and limiting housing availability for Spanish citizens. Its abolition is part of a larger European push to phase out citizenship-by-investment schemes.
Why Did the Spanish Senate Veto the Ban?
The veto reflects the political divide between Spain’s Senate and Congress. While Congress, led by Prime Minister Pedro Sanchez and his coalition government, supports the ban, the Senate is controlled by the opposition party, the Partido Popular (PP).
The PP argues that the government’s handling of the bill has been flawed. The Golden Visa ban was bundled with the Judicial Efficiency Bill, a piece of legislation focused on expedited trials for squatting cases. Critics, including the PP, called the proposal a “hodgepodge of uncoordinated legislative amendments” and argued that the two issues should have been handled separately.
The Senate’s opposition could delay the ban for months or even longer. Still, since the Congress holds the final decision-making power, it’s widely believed that the ban will eventually go ahead.
What is Spain’s Golden Visa?
Spain’s Golden Visa scheme, launched in 2013, allows non-EU citizens to obtain residency through specific investments, primarily in real estate. The most common route is a minimum investment of €500,000 in Spanish property. Other options include investing €1 million in shares of Spanish companies or €2 million in government bonds.
The Golden Visa grants successful applicants the right to reside and work in Spain, but unlike other residency permits, it does not require them to live in the country full-time. Beneficiaries only need to visit Spain for one day per year to maintain their residency status.
Over the years, this scheme has attracted investors from around the world, with the highest number of applicants coming from China, Russia, and the UK. However, the top source of investment capital is from the United States, whose citizens invested €1.6 billion in Spain through the programme between 2018 and 2022.
Why is Spain Abolishing the Golden Visa?
The Golden Visa has been both a financial boon and a source of controversy. While it brought billions of euros into Spain’s economy, critics argue that it also contributed to the nation’s housing crisis.
Around 94% of Golden Visa applications were made through real estate investment, leading to a surge in property demand. Critics claim this inflated housing prices, making homes less affordable for Spanish citizens. The Bank of Spain estimates that the country needs 600,000 new homes annually to meet demand, but current plans only target 90,000 new homes per year.
Additionally, the European Commission has urged EU countries to end citizenship-by-investment programmes, citing concerns over money laundering, tax evasion, and security risks. Other countries, such as Portugal, Ireland, and the Netherlands, have already terminated their Golden Visa schemes, while Albania dropped its plan to introduce one.
Surge in Golden Visa Applications Before the Ban
When news of the impending ban broke in April 2024, a rush of new applications followed. Data reveals a significant uptick in approvals. From January to March 2024, Spain was issuing about 69 Golden Visas per month, but from April to October, approvals rose to 95 per month.
By October 2024, Spain had approved 780 Golden Visas, with 573 granted after the ban announcement. It appears that investors, especially those from China, Russia, and the UK, were keen to secure residency before the window closed.
Who Benefits the Most from Spain’s Golden Visa?
Since its inception in 2013, Spain’s Golden Visa programme has drawn significant interest from wealthy investors. Here’s a look at the top countries that have benefited:
- China: Chinese nationals received 3,300 visas from 2013 to 2023, making them the largest recipients.
- Russia: Russian nationals received 3,100 visas, putting them in second place.
- United Kingdom: Following Brexit, many UK citizens applied for the Golden Visa to secure EU residency, with over 1,000 visas issued to UK nationals.
- United States: While the U.S. does not have the highest number of applicants, its citizens are the top investors, having contributed €1.6 billion to the Spanish economy through the scheme.
Which European Countries Have Already Banned Golden Visas?
Spain is not alone in phasing out its Golden Visa programme. Several EU nations have already taken similar action, citing concerns over corruption, tax evasion, and real estate inflation.
Here’s a quick look at Europe’s approach to Golden Visas:
- Ireland: Ended its Golden Visa programme in February 2023.
- Portugal: Scrapped its real estate investment visa in 2023 to control property prices.
- Netherlands: Ended its Golden Visa scheme in January 2024.
- Malta: Still offers a “Golden Passport” programme, allowing full citizenship in exchange for a €700,000 investment.
- Italy and Greece: Both still have active Golden Visa programmes, allowing residency through property investments.
- Hungary: Reopened its Guest Investor Programme in October 2024.
The European Commission has been vocal about its opposition to investment-for-residency schemes, pressuring EU member states to eliminate them.
When Could Spain’s Golden Visa Ban Take Effect?
Although the Senate vetoed the ban in December 2024, Congress can override it in the coming months. Experts predict that, if Congress moves quickly, the ban could be published in the Official Gazette in January 2025 and take effect by April 1, 2025.
This delay gives foreign investors a short window of opportunity to apply before the scheme ends. It also raises questions about the fate of ongoing applications that have yet to be processed.
Spain’s Golden Visa ban is part of a broader European trend to limit “citizenship-for-sale” schemes. While the Senate’s veto has delayed the process, the Congress holds the final authority. Investors looking to benefit from the programme should act quickly, as it is widely expected that the ban will come into force by April 2025.
With Portugal, Ireland, and the Netherlands having already ended their Golden Visa schemes, Spain may be the next to follow suit. Investors who previously saw Golden Visas as a pathway to Europe will need to look elsewhere, with Italy, Greece, and Malta being some of the few remaining options.
The fate of Spain’s Golden Visa programme may be uncertain, but the trend across Europe is clear: investment-for-residency is on the way out.
