The Golden Visa scheme is not going away in Spain. However, the Spanish government is getting ready to make significant adjustments to the investment choices.

In the past, foreign investors have obtained residency in Spain through the residency by investment program by purchasing a property valued at €500,000 or more. These days, criticism of the program’s continuation is contingent upon the statement delivered at the Council of Ministers meeting in April 2024. To solve Spain’s internal problems with housing, the declaration portends a major change in immigration and housing policy. 

What’s Driving the Growing Popularity of Spain’s Golden Visa?

Since its launch in 2013, Golden Visa in Spain has drawn in much international investment. During the eurozone crisis, which also had a negative influence on Spain’s real estate market, this attention was particularly focused.

Spain has issued more than 6,200 golden visas just for the purpose of investing in real estate. The concept gained especially traction with investors from China, Russia, and Iran. However, there were also sizable numbers of Americans seeking a second destination in Europe, particularly in the United States and the United Kingdom following Brexit. 

A Fresh Look at Spain’s Housing Market and Future Prospects

The Golden Visa investment provides foreign cash to the nation’s economy. Nonetheless, as the Spanish government has made clear, new assessments reveal that 94% of the golden visas granted in Spain were awarded to residents of the country’s largest cities. Thus, there is growing tension in the property markets of Madrid, Barcelona, and the Balearic Islands.

The goal of the change, according to Spanish Prime Minister Pedro Sánchez, is to make housing less of a “speculative business” and more of a basic entitlement. It eliminates the real estate investment option from the golden visa investment possibilities. 

The Critics Against the Real Estate Investment Option

Why do critics in European nations like Portugal and Spain seem to oppose foreigners applying for golden visa schemes through real estate investments?

As Francisco Iñareta from Idealista points out, the core of the criticism centers on fundamental issues with housing supply and affordability in Spain. It seems unlikely that the golden visa program will resolve these issues. The primary causes are Spain’s growing housing shortage and increasing demand for housing. As a result, the effects on the real estate market and the purchasing power of the local population appear to be the main concerns rather than the investment-driven residency program itself.

Golden Visa Trends in Europe

Following Portugal’s changes, Spain switched to a golden visa scheme without making any real estate investments. The fund investment option, which gained popularity following the revisions, is how applications for Portugal’s golden visa program are still accepted. The scheme is still in operation.

Certain nations, such as the UK and Ireland, have already ended their own golden visa initiatives. Portugal and the Netherlands, however, are still operating under their altered schemes that do not allow real estate investments.

As highlighted by the investment advisory firm Get Golden Visa, Portugal’s Golden Visa initiative became even more popular in 2024 due to significant changes in the country’s citizenship laws. These adjustments have simplified the citizenship application process for Golden Visa holders. Applicants can now apply for citizenship after a five-year waiting period, which starts with the initial residence application, regardless of whether it’s accepted. This streamlining has further enhanced the program’s appeal to global investors.

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How Will the Program Move Forward?

How Spain will handle the switch to the Golden Visa program without the real estate investment option is still up for debate. The impending change is a response to the necessity of striking a balance between cheap housing for the local populace in Europe and foreign investors. As a result, this awareness is growing both among prospective investors and in Europe.

These alterations are still happening. Additionally, residents may still see residence choices under Spain’s Golden Visa program as financial prospects for prospective investors and current visa holders.

The best way to balance social welfare and economic incentives is still up for dispute. Discussions around European golden visa initiatives, however, indicate that these initiatives may influence how people will be able to dwell on the continent in the future via investment.

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