The current Spanish government, led by the Socialist Party (PSOE) and the leftist Sumar party, has taken a significant step towards dismantling the country's golden visa program, which was initiated in 2013 to attract foreign investments during an economic downturn. Initially launched by the conservative administration under Mariano Rajoy, the golden visa initiative has granted residency permits to approximately 15,000 individuals who invested in properties valued at over €500,000 over the past decade.
In a move that could have far-reaching implications for foreign investors, the PSOE has formally submitted an amendment to Congress aimed at rescinding all investment routes to residency, including the golden visa scheme. Krista Victorio, Managing Partner & Client Services of Orience, commented on the potential impact of the proposed amendment, noting that while it does not directly target the 2013 law that established the golden visa program, it seems to leverage an existing law project to indirectly affect the program.
Despite the availability of alternative investment options such as public debt, shares, bank deposits, funds, and business projects, the vast majority of golden visas have been secured through real estate investments. This trend has raised concerns among government officials about exacerbating pressure on the already strained Spanish housing market, especially in regions with high real estate demand.
The proposed amendment is being driven by Housing Minister Isabel Rodríguez and aligns with Prime Minister Pedro Sánchez's commitment to address the housing issue, which has been exacerbated by soaring property prices. The amendment is expected to receive strong support in Congress and will encompass the revocation of all forms of golden visas, including those obtained through investments in business projects.
While specific details of the proposed amendment have not been disclosed, it is believed to aim at nullifying articles 63, 64, 65, 66, and 67, thereby disallowing the grant of new visas for real estate, shares, funds, or public debt investments. Existing visas will be allowed to remain valid and can be renewed as per the usual process.
The government has emphasized the detrimental impact of escalating property prices on social progress, particularly among the younger demographic, as housing costs absorb a larger share of household incomes. Despite potential obstacles in the parliamentary process, the coalition is expected to have substantial backing in Congress for the discontinuation of the golden visa program.
The explanatory statement accompanying the amendment highlights the government's concerns regarding the absence of desired investment inflows through the golden visa program, primarily driven by real estate transactions, which are deemed insufficient in generating employment and contribute to an overheated market. Additionally, the government points to the discontinuation of similar permits in other European nations, following recommendations from the European Commission, amid apprehensions about money laundering and the influx of wealthy individuals availing such visas.
In the event of the amendment being ratified, new golden visas will no longer be issued, with key provisions of the 2013 legislation supporting entrepreneurs and internationalization being annulled. However, the proposal includes transitional provisions that allow existing visas to persist or be renewed based on the criteria outlined in the 2013 law.
Given the evolving landscape and the shifting dynamics of such programs, stakeholders are advised to consider securing the Spain golden visa under the current legislation, as changes may be imminent.
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