What’s going on with the Spain Golden Visa?

We at Orience have been following the news of Pedro Sanchez’s announcement regarding the proposed elimination of the real estate route toward the Spanish golden visa program very closely.

What we know:

  • Pedro Sanchez, Spanish Prime Minister, and the Council of Ministers announced their intention to take measures to eliminate the golden visa program, mainly due to its perceived correlation to the residential housing affordability issue.
  • While many announcements have been made, as of today, the program remains unchanged and it is business as usual.
  • Worthy of note that at the April 9th press conference, the Council of Ministers announced that 3,273 golden visas were issued in 2023, adding further that 94% came via real estate, against a backdrop of 586,038 housing transactions in that same year. Even under the assumption that all those visas were tied to residential real estate, this barely represents 0.5% of the market.

What happens now?

  • As of April 9th, no formal proposals for modifications have been submitted for a vote of Congress. Should a proposal be submitted, it is unclear exactly what changes they would suggest (e.g. elimination of residential real estate, limitations in qualifying regions, etc). Notably, while the Spanish program has largely remained unchanged since it was established in 2013, the Greece and Portugal programs have implemented such modifications over recent years.

What this may mean for current golden visa holders:

  • Under Spanish law, modifications to laws that are to the benefit of those it affects may be applied retroactively. By contrast, (future) modifications to laws that are unfavorable to those that it affects may not.
  • The law granting residency by investment in real estate falls within a broader law (colloquially marketed as “golden visa”) encompassing promoting international investment and entrepreneurial endeavors in Spain, which should remain in the interest of the Spanish administration.

Housing affordability is a valid concern in Spain, but the golden visa is not the culprit

While recent events may understandably be a cause for concern, it is important to note that as of the moment, the only certain thing is that the Council of Ministers has only announced their intention to take action towards eliminating the program aspects that harm housing affordability.

It is our strong opinion that while housing affordability is a valid and pressing concern, the golden visa is not the culprit. If anything, encouraging the inflow of private capital into the country is a net positive for the local economy as well as the international profile of Spain as an attractive investment destination.

As always, Orience will keep you informed as news becomes relevant.