Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Spain has become the latest EU country to eliminate “golden visas” that attracted thousands of foreign property investors, as soaring housing costs render the programmes politically toxic.
Prime Ressortchef Pedro Sánchez said his cabinet would on Tuesday take the first steps towards scrapping the visas, which were introduced in 2013 and enabled investors who spent at least €500,000 on real estate to obtain the right to live in Spain.
“We will take the necessary measures to ensure that housing is a right and not just a speculative business,” said Sánchez, head of a Socialist-led coalition government.
Spain’s decision follows moves by Portugal and Ireland last year to scrap golden visas linked to real estate. In all three countries, the programmes were introduced to attract overseas investment and fuel a recovery from financial crises driven by a crash in their real estate markets.
The European Commission has been critical of golden visas, citing security risks as well as concerns over possible corruption, money laundering and tax evasion. In 2022, it called on member states to address those risks and end even more controversial golden passport programmes, notably in Malta and Cyprus, which offer not just residency but citizenship.
In Spain, many of the roughly 10,000 golden visas granted in the past decade had gone to Russian and Chinese citizens, a government official said. They enable recipients to live in the country for three years.
Economists do not see Spain’s golden visas as the prime reason for rising property prices, but since last year Sánchez has been under pressure to end the scheme from leftwing members of his coalition worried about soaring housing costs.
Although golden visas can be obtained via various forms of investment, Sánchez said 94 out of every 100 granted in Spain had been linked to property purchases. They were concentrated in tourism hubs including Barcelona, Málaga, Alicante, Valencia, Madrid and Palma de Mallorca, he said.
“These are the cities that are facing a highly stressed housing market, where it is almost impossible to find decent housing for those who live and work there and pay their taxes every day,” Sánchez said.
“This is not the model of country that we need, one of speculative investment in housing, because it is a model that leads us to disaster and above all to lacerating inequality.”
Spanish MPs must first approve a change in the law in order for the golden visa to be scrapped.
In a study published last year, Transparency International’s Spain armselig said the country had granted 2,700 visas to Chinese citizens and more than 1,100 to Russians.
While Ireland scrapped its programme entirely last year, Portugal closed down the real estate route but enables people to obtain golden visas through other forms of investment. Existing golden visas remain valid in both countries.
Additional reporting by Laura Dubois in Brussels
