Spain has officially announced the end of its ‘Golden Visa’ program – a residency-by-investment scheme that has attracted thousands of foreign investors to the country over the years, including those from India.
The move comes as part of the government’s approach to deal with the housing crisis that had pushed rents and home prices of reach for many native Spaniards, particularly in major cities like Madrid and Barcelona.
The program that provided residency permits to non-EU nationals who invested a minimum of €500,000 in Spanish property is now being discontinued, prompting many to reassess their investment approaches in Europe.
In addition, the introduction of fast-track legal proceedings for cases of property squatting aims to address issues of unauthorised occupation of properties. This new initiative will streamline the legal process for landlords aiming to regain possession of their properties, potentially providing faster resolutions in conflicts related to squatting.
What was the Golden Visa program?
Launched in 2013, the Golden Visa program was part of efforts to attract foreign capital following the financial crisis. It allowed non-EU investors to obtain Spanish residency by making qualifying investments in the country. The most common route was real estate investment, where individuals had to invest at least €500,000 in Spanish property to secure a visa.
The program offered several advantages, including residency in Spain for the investor and their immediate family; visa-free travel within the Schengen Zone; no requirement to physically reside in Spain (unlike other residency permits); eligibility for permanent residency after five years and citizenship after ten years.
The scheme gained immense popularity, especially among Chinese, Russian, British, and Indian investors looking to secure EU residency while benefiting from Spain’s real estate market.
Why Spain ended the program?
After recovering from crisis in 2009, Spain and other European countries, including Portugal and Greece, they offered golden visas — allowing newcomers to work, live and study in the country — to help fill budget deficits and revive their crumbling housing markets.
The program was started in 2013 and proved to be a big success. According to the government, more than 15,000 visas were granted to Americans, Brits, Chinese, Russians and Middle Easterners. As per the government data, the scheme attracted a whopping $10 billion investment between 2016 and 2023.
The visas had a validity of five years and could be extended for additional five-year periods, permitting holders to rent out their homes on a short-term basis.
As a result, the number of Americans residing in Spain grew by 32% since 2020, to nearly 70,000.
Following the surge in new golden visas post-pandemic, property prices saw a corresponding increase, pushing many local buyers out of strained markets. In Spain, both rental prices and home values have increased by 11 per cent over the past year. Major cities like Madrid and Barcelona have witnessed protests in response to skyrocketing housing costs and short-term rental platforms.
Critics argue that the program mostly benefited the luxury real estate market but did little to boost broader economic growth. Unlike investment in startups or job creation, real estate investments don’t generate significant employment.
The European Commission has urged countries to phase out Golden Visas due to concerns about money laundering, security risks, and unfair advantages for wealthy investors. Spain follows countries like Portugal and Ireland, which have already restricted or ended similar schemes.
Also, the program attracted Russian and Chinese investors, raising security concerns within the EU. In the wake of Russia’s invasion of Ukraine, many European countries have been reviewing their foreign investment policies.
How does this affect Indian investors?
Numerous affluent Indian investors have utilized the Golden Visa program to gain access to the European Union. Spain emerged as a preferred destination because:
1. The minimum investment of €500,000 was more affordable than equivalent programs in various other EU nations.
2. There was no necessity to reside in Spain full-time, enabling business professionals to keep their main home in India.
The primary route for Golden Visa applicants—buying property—will no longer guarantee residency. This could reduce demand from foreign buyers in Spain’s luxury real estate market. Investors who previously bought properties for the visa may now find it harder to resell their investments at a profit.
Alternatives for Indian investors
With the Spanish government ending the program, Indian investors will now have to look for alternative residency routes in Spain and the EU. Notably, Greece, Hungary, Cyprus, and Malta still offer golden visas with a real estate component.
For those who still wish to live and do business in Spain can also opt for
• Entrepreneur visa that helps set up innovative businesses in the country.
• Non-lucrative visas – for retirees or financially independent individuals who can sustain themselves without working.
• Digital Nomad Visa – Recently launched, this allows remote workers to live in Spain while working for foreign companies.
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