The end of Spain´s Golden Visa

After over 10 years of operation, the Spanish government has recently announced plans to cancel the Golden or Investment Visa scheme. Designed to offer the stability and benefits of Spanish (EU) residency in exchange for investment in the country in the wake of the financial crisis, around 6,200 permits were issued under the scheme until September 2023. Although the numbers suggest that its cancellation will not significantly affect the Spanish property market, potential investors should move fast to benefit from this fast route to Spanish residency.

Spain´s Golden Visa

Launched in 2013, the Golden Visa, or the Investor Visa, is an investment-driven scheme offering residency rights in return for qualifying significant investments in specific Spanish assets. This requires a minimum investment of €500,000 in purchasing property in Spain, €1 million on shares in an eligible Spanish company, bank deposit or investment funds, or €2 million in Spanish treasury bonds.

A report by Transparency Internacional España pertains that 6,200 permits were issued under the scheme in its first ten years of operation until September 2023, of which around 96.18% were related to property purchases. Of the total permits given, nearly 18.7% were issued to Russian investors (1159 visas), 43.7% to Chinese nationals (2,712), about 3.3% to Iranian nationals, and 2.9% to US and UK citizens.

Once the Golden Visa is approved, the permit provides legal residency for one to three years. It can then be extended if all the requirements are still met, and it can eventually lead to obtaining permanent residency and even Spanish nationality. Besides the advantages of living and working in Spain, the Spanish Golden Visa also allows for free movement within the European Union as part of the Schengen Agreement.

Planned cancellation of the Golden Visa

On 8 April 2024, Spain’s President Pedro Sánchez announced plans to cancel the Golden or Investor visa scheme, stating, “We are going to take the necessary measures to guarantee that housing is a right and not a mere speculative business”, noting that visas linked to property purchases are centred in cities such as Barcelona, Madrid, Malaga, Alicante, Palma, and Valencia. Rental markets in these areas have been receiving increasing pressure due to the proliferation of holiday rental properties in recent years.

Given that less than 6,080 permits were issued for property purchases under the scheme throughout the country as of September 2023 (Transparency International España), its cancellation seems unlikely to impact the local property market significantly. This is especially true for Britons, given that only 177 had received permits under the scheme before September 2023, of which around 166 were related to real estate purchases across Spain. It seems that the overwhelming majority of UK citizens looked for more permanent means to enjoy their homes in the Spanish sun. The changes are also unlikely to have any major impact on the prime market, as the truly wealthy are likely to be tax residents in other places who do not spend more than 90 days in any one place.

For the moment, the change is a proposal that will take at least a few months to be ratified and passed by the government, but the writing is on the wall for the change to occur sometime in 2024. The abolition of the Golden Visa or Investor Visa scheme will probably not affect those who have already received permits until the changes are finalised, so it is a good push for anyone wanting to obtain a Golden Visa to get a move on and do it now. However, there should always be other means for non-Europeans to obtain residency and freely enjoy their Spanish dream home.

Popular places to buy property in Spain

For foreigners buying property in Spain, the areas of interest have been Madrid, Barcelona, Valencia, the Canary and Balearic Islands, and the Costa del Sol – particularly Marbella, the Golden Mile, and Benahavís. 

The Costa del Sol´s practical appeal includes plentiful and cheap flights around Europe, a relatively low cost of living, a prevalence of English speakers, an overall high level of safety, diverse a-list amenities, and an excellent variety of Spanish and international schools. For anyone interested in buying a property in Spain to enjoy the best of nature, weather and culture that it offers, the Golden Visa is an easy ticket for internationals to buy property in the Marbella area, and enjoy it as much as they like.

Buying property in the Costa del Sol

When buying property in the Costa del Sol, it´s important to note that purchasing a property in the Costa del Sol has the following costs:

• Resale property transfer tax (ITP) of 7% – one of the lowest rates in Spain
• Buyers purchasing new properties direct from the developer pay 10% VAT (value-added tax), instead of ITP
• Purchases of land plots attract 21% VAT tax, instead of ITP
• Stamp duty (AJD) of 0-2,5% depending on the property
• Notary and legal fees of 2-3% of purchase price
• Also, if you are in Spain more than 180 days in a year, you may be liable to pay Spanish taxes on your worldwide assets and income

Applying for Spain´s Golden Visa, or Investor Visa

The applicant requires the following to qualify for the Spanish Golden Visa:

• Proof of purchase, with the stated amount paid without a loan (e.g., deed of sale of the Spanish property)
• Proof of financial resources, health certificates, and evidence of no criminal record or outstanding charges against them
• The initial application can be made to the Spanish consulate in their home country, or online in Spain

An answer is usually received within 20 days of submitting all the required information. The next step is to acquire a TIE (Tarjeta de Identidad del Extranjero) and take fingerprints at a police station in Spain.

With recent discussions in parliament suggesting that the scheme will end in 2024, investors should move fast to take advantage of this easy ticket to the ultimate Mediterranean lifestyle.

Contact MPDunne & Hamptons International if you would like to know more about the Spanish Golden Visa, or help when buying or selling property around Marbella, Estepona or Benahavís. We can seamlessly and transparently guide you through the whole process with professionalism and experience.