Spain Is Scrapping Its Golden Visa Scheme. What Does That Mean For You?

The Spanish government has made the massive decision to scrap its popular 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.

But will it affect foreigners who already own property in the country? And what might the government do to deter foreign investors next? Here’s everything you need to know:

Why Is Spain Getting Rid Of The Golden Visa Scheme?

This is a relatively new decision which was announced by the Spanish Prime Minister, Pedro Sanchez, on 9th April. Until now the golden visa scheme allowed non-EU nationals a unique visa if they invested at least €500,000 in Spanish real estate.

But the Spanish culture minister has described the concept of golden visas a "European disgrace…which creates first and second-class citizens." What’s more there are EU-wide concerns about the impact these visas are having on local property markets.

In a statement announcing the redaction of the golden visa scheme Mr. Sanchez said "we are going to take the necessary measures to guarantee that housing is a right and not a mere speculative business" and thus "begin the procedure to eliminate the granting of the so-called golden visa".

What Does This Mean For Foreigners Living In Spain?

If you are an EU citizen, then you will be unaffected by this news. But if you are a 3rd party national, such as a Briton or an American, hoping to live in Spain then this is bad news for you. There is now one less visa-type available to you to make your dream of living in Spain a reality.

But it is important to put that into context. Because the financial commitments of the golden visa were so high, this visa type was only accessible to a limited few. So, for us ‘everyday Joes’ hoping to move to Spain, very little will change.

It’s also worth noting that this means that there is no longer a visa for foreigners in Spain where you are entitled to residency if you don’t live in Spain. Now all accessible visas will require that you are a tax resident of Spain and that you actually live in the country.

What Happens If You Already Own A High-Worth Property In Spain?

The Spanish Golden Visa scheme could be applied retroactively. That means that if you owned a high worth property with a value of €500,000+ then you could use this to access the golden visa. For these homeowners, this is no longer the case.

In-depth details about the removal of the scheme are yet to be released. But it is likely that the other ways of accessing the golden visa - investing €1 million in shares in Spanish companies, or €2 million in government bonds, or transferring €1 million to a Spanish bank account - may also cease to be means to gain Spanish residency through investment.

In the past 10 years only 10,000 people have obtained a golden visa in this way. So this is something that is affecting a very small number of people.

What If I Already Have A Golden Visa?

The people most likely to be panicked by this announcement are those already living in Spain who accessed the country via the golden visa scheme. Unfortunately, we aren’t able to offer much reassurance at this stage because only the initial plans for its withdrawal have been announced.

It isn’t clear yet whether foreigners currently on Spain’s golden visa will be allowed to hold onto the scheme or whether they will be offered the option of Spanish residency through an alternative means. Of course it is hoped that, given these individuals are Spanish homeowners, some arrangement will be put in place.

Other visa options that may work if you’re looking for a quick-fix alternative include the non-lucrative visa (if you don’t want to work during your time in Spain) or the new digital nomad visa (if you do).

What Will The Spanish Government Do Next?

When changes like this are introduced it’s natural for foreign residents living in Spain to feel uncertain and concerned about what might happen next.

We know that the popularity of Spain amongst foreign investors has negatively affected the already difficult Spanish housing crisis. And the prevalence of short-term lets and AirBnB properties has only made this worse. As a result, there have been protests in the Canary Islands and Malaga in recent weeks.

The culmination of all of these things means that many people in Spain are calling for non-residents to be banned from buying properties in Spain. The removal of the golden visa scheme should be seen as a high-level attempt to appease these protests without having too much impact on foreigners living in Spain.

But given only 451 golden visas were granted in 2022, the real impact of this change will be negligible. Only time will tell if further action will be needed to create a balance between the housing needs of the Spanish population and the economic needs of an economy that relies on tourism and foreign investment.

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