Spain Cancels Golden Visa Scheme And Drives Boom In Chinese Investment

We recently reported that the Spanish government would be phasing out their Golden Visa scheme. This will affect foreigners who want to buy a property and invest in Spain in order to secure a residency visa in the country.

Until now foreign investors have effectively been able to use their spending power to purchase a Spanish visa.  In the simplest terms, foreign nationals could apply for a unique visa if they invested at least €500,000 in Spanish real estate.

We know that this scheme is being phased out, but what we don’t yet know is when. The result? A stampede of foreign investors, particularly investors from China, rushing to buy property in Spain and secure a golden visa as a result before it’s too late.

Here’s what you need to know:

A Surge In Chinese Investors

In the past 2 months Spanish real estate agents have reported a surge in Chinese investors buying up property in Spain so that they can take advantage of the Golden Visa scheme before it ends.

This is currently the most affordable way for non-EU investors to secure a Spanish residency visa, as the only requirement is to  buy real estate worth €500,000.

There are other ways to secure a Golden Visa, but these require significantly more financial investment. You can get a Golden Visa by investing €1 million in shares in Spanish companies, investing €2 million in government bonds, or by transferring €1 million to a Spanish bank account. Whilst the property version of the Golden Visa is being phased out, it looks likely at this point that these investment routes will remain open. However they do require a bigger financial investment that simply isn’t as appealing as the property purchase scheme.

Invest Now Before It’s Too Late

The feeling amongst Chinese investors is that they need to purchase properties in Spain now, before it’s too late. And because the date when the scheme will be ended hasn’t been announced yet, many Chinese investors are speeding up the process as much as possible to ensure they don’t miss the deadline.

According to Long Fang, CEO of Bafre Inmobiliaria, "we've noticed growing demand." She went on to elaborate that the number of Chinese golden visa purchases handled by her company has quadrupled since the government’s announcement.

Although Chinese investors are looking for the right property, their primary concern is with securing a visa that will facilitate their entry and exit to the EU for both business and tourism purposes. Often these investors are looking for properties they can place on the rental market.

There is a huge range of property types that Chinese investors are showing interest in. Some choose to buy several cheaper flats to hit the required  €500K figure so they can generate a rental income. Others will set up businesses in industrial properties, but some will buy single luxury properties for their own use.

According to Foreign Ministry figures the Chinese investment market is the market that has most benefited from the Golden Visa Scheme. A total of 2,712 golden visas have been issued to Chinese nationals since 2019 . Of these, 99.33 percent were via property purchases.

Why Is The Golden Visa Scheme Being Scrapped?

The Spanish culture minister has described the concept of golden visas a "European disgrace…which creates first and second-class citizens."  And the scheme has been considered controversial both in Spain and across Europe. It is considered by many as an option to sell citizenship which shouldn’t be available with a price tag.

What we don’t know yet is when the scheme will actually be scrapped. Which is having the converse effect of driving up interest, with foreign investors trying to get their golden visas before it’s too late.

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