Spain scraps 'golden visas' for foreign property investors, while Italy continues to encourage them

Prime Minister Pedro Sánchez said on Monday (8 April) that Spain would abolish the “golden visa”, a program that grants the right of residence to foreigners who make large real estate investments in the country.

Abolishing the program would help make access to housing at humane prices “a right rather than a speculative activity,” Sánchez said.

The program grants non-EU citizens who invest at least 500,000 euros – without access to a mortgage – in Spanish real estate a special permit that allows them to live and work in the country for three years.

“Today, 94 out of 100 of these visas are linked to real estate investments… in big cities which face a very saturated market and where it is almost impossible to find decent accommodation for those who live, work and already pay taxes,” Sánchez said.

He added that the government would begin the process of eliminating the “golden visa” regime at its weekly meeting on Tuesday, April 9, after considering a report presented by the Ministry of Housing and Urban Agenda.

Since the start of the golden visa regime in 2013 until November 2022, Spain has issued almost 5,000 permits, according to government data.

Chinese investors top the list, followed by Russians who have invested more than 3.4 billion euros, according to a 2023 Transparency International report that casts doubt on whether authorities investigated the source of funds.

This measure is unlikely to have an impact on the real estate market, given that less than 0.1% of the 4.5 million homes sold during this period were purchased under this program, according to the site Idealista real estate.

Spain’s housing problem was not caused by the golden visa system, but rather by a lack of supply and a sharp rise in demand, said Francisco Inareta, a spokesperson for Idealista.

“The measure announced today, which focuses on international buyers instead of encouraging new homes to come onto the market, is another misdiagnosis,” Inareta said.

Neighboring Portugal recently renewed its “golden visa” program and excluded real estate investments to combat the housing crisis. Foreigners who wish to obtain a right of residence can always invest their money in investment funds.

The European Commission has long called for an end to these programs, citing security risks.

The Italian “golden visa” program

Also in Italy there has been a golden visa program since 2017 that allows non-EU citizens to enter and stay long-term in Italy in exchange for huge investments in the country.

Concretely, the “Investor Visa for Italy” program provides the possibility, only for natural persons, of issuing a residence permit for a maximum duration of two years in exchange for an investment of at least 2 million euros in government bonds, or 500 thousand euros. in an Italian limited company, or 250,000 in an innovative Italian startup, or 1 million in a philanthropic initiative.

The objective of this measure is to attract foreign capital by exploiting the potential, in terms of interest, of wealthy non-European citizens towards the Bel Paese.

However, from July 14, 2023, in accordance with European Union Recommendation C (2022) 2028, the Golden Visa program is suspended for Russian and Belarusian citizens.

(with an addition from Sara Bertolli)

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