By Moustafa Daly
Shortly after Portugal and Ireland announced ending their golden visa programs back in February, the Spanish left-wing Más País party also announced it would soon be submitting a proposal to the country’s parliament to end the real estate option of Spain’s golden visa.
On Monday, the party’s leader Iñigo Errejon told reporters in Madrid that his party reached an agreement with the Social Security Minister, which included either pulling the plug on the golden visa altogether, or increasing restrictions and investment threshold for potential applicants.
Blaming the golden visa for causing a hike in property crisis, Errejon reportedly said that the golden visa was a ‘backdoor privilege’ for wealthy individuals, further lambasting the program for turning Spain into a "sort of colony, often attracting dark money".
Spain’s second biggest newspaper, El Pais, cited official sources who said the Spanish government is contemplating scrapping the visa or introducing tougher requirements. However, the Social Solidarity Ministry is yet to confirm such plans, announcing that proposals made by political parties in this regard are currently being studied.
“I do not believe there will be a significant change in the main ways through which foreign investors may obtain the Spanish residency. The only assumption that could be subject to modification or elimination in the near future could be that of investors in real estate,” said Javier Cuevas Fernández, cofounder & head of the legal department at Madrid-based Citizens Immigration, to Uglobal.
Is the end of Spain’s Golden Visa an election stunt?
The Más País party currently has three seats in the Spanish congress. With the upcoming elections set to take place on May 28, 2023, some professionals in the country are wagering the attack on the golden visa is simply to gain election points with the public – albeit stemming from a very real housing shortage.
“This housing shortage is more pronounced in areas or zones where there is a greater attraction of foreign capital applicants for this type of authorization, such as Madrid, Barcelona, and the tourist areas of the coast, especially the Canary and Balearic Islands,” explains Fernández.
“I think that this argument of high housing costs and the difficulty of access for younger people will be used during the electoral campaign and will undoubtedly serve as a basis for some political parties to request the elimination of this type of residency,” he adds.
A recent decision by the Portuguese government to end its golden visa program, the continent’s most popular, citing inflated property prices, is the foundation upon which some Spanish parties are attempting to make a case to end their country’s golden visa.
“The recent restriction in Portugal of this residency for similar reasons further justifies the fact that some parties in Spain will be raising this debate,” says Fernández.
Increasing the investment threshold may be a more viable option
As per Spanish media reports, the Spanish government is also considering doubling the investment threshold for the real estate option of the golden visa, hiking it from €500,000 to a million. This is yet to be confirmed by the government, but remains a potential option going into election season.
“Since the general elections will be in November of this year, the government coalition parties will raise this issue as a possible solution to the rise in housing market prices,” predicts Fernández. “This could translate into an increase in investment requirements to access this type of residency, or it’s even possible [to scrap it] if the government follows the more radical postulates.”
Fernández doesn’t rule out either possibility seeing that he views the outlook for most parties in the upcoming elections as grim, which may push the government to take drastic steps to address the public’s grievances over property prices.
“They will try to launch any measures to justify to the public they are trying to fix the housing shortage and no doubt this could be a popular decision,” he elaborates.
Ending Spain’s golden visa may have dire ripple effects
Launched in 2013, the Spanish golden visa was an attempt by the government to address a stagnate property market and attract foreign investors to the country following the global financial crisis.
The program has witnessed quite a success, with Spain issuing up to 5000 golden visas to date across all categories – which are real estate (€500,000), investment in public debt (€2 million), or buying company shares (€1 million).
Therefore, a potential end to the program isn’t seen as a positive development – potentially affecting interest in other visa options like the digital nomad visas. This was seen in Portugal, which witnessed a slump in applications to its digital nomad visa, which is still open to applicants, shortly after it announced its plans to scrap the golden visa.
“I believe that the scrapping of this residency option would be terrible news,” says Fernández
“Since its introduction in 2013, the International Mobility Law, this type of authorization has significantly facilitated the entry of foreign capital into Spain and the arrival of investors in Spain. Additionally, it would be a step back after the significant novelties that have come into effect in Spain, such as the visa for teleworkers and the reform of the Immigration Regulation,” he adds.
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