The end of the ‘Golden Visa’ for non-EU foreigners, which allowed them to obtain a residence visa, among other operations, with the purchase of properties worth more than 500,000 euros in Spain, has became a reality. The visas were approved by the centre-right Partido Popular government in 2013 after the bursting of the property bubble and until 2023 more than 14,500 permits for property investments had been registered, recording a notable growth in recent years coinciding with Brexit and the war in Ukraine.
It was exactly a year ago that the Prime Minister, Pedro Sánchez, announced his plans to eliminate the visa, claiming that it was causing problems of access to housing in certain cities and arguing that housing is a right and “not a mere speculative business”. The ‘Golden Visa’ programme allowed people to obtain a residence visa by purchasing property worth more than 500,000 euros in Spain or by investing in bank deposits, public debt, shares, investment funds and business projects of general interest.
Barcelona, Madrid, Malaga, Alicante, the Balearics and Valencia have accounted for 90% of all the authorisations granted in recent years, which have mainly benefited Chinese and Russians.
In addition to the end of the ‘Golden Visa’, and after several neighbouring countries have tightened or revised these permits, the government also wants to limit the purchase of housing by non-EU foreigners by introducing a tax disincentive, though it remains to be seen whether it happens or not, through a 100% VAT or through the Transfer Tax.
The real estate sector believes that the measure will have a very limited impact, since neither the locations nor the product that these investors buy is what the average person in Spain is looking for and they regret that a negative message is being sent to international investors.
Furthermore, as of Thursday, new tourist apartments will need the express approval of the community of owners with a three-fifths majority and, without this consent, the owners may demand their immediate closure. This is the same majority that will be required to agree special fees or an increase in the share of the common expenses of the property where the activity is carried out, provided that they do not represent an increase of more than 20%.
The aim is to ‘empower’ residents’ associations, which may or may not give their approval to tourist rentals in view of the proliferation they are experiencing in Spain and the problems of access to housing. This new regulation will not, however, affect owners who already had tourist flats before this date, they will be able to continue operating. In addition to this, the government has also created a single register to prevent fraud in the commercialisation of short-term rentals, including tourist rentals, which will come into effect on 1 July.
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Will existing holders of the golden visa have their residency withdrawn when renewal time comes?