The end of the Golden Visa in Spain?

Last week, two European Union member states, Portugal and Ireland, announced the termination of their Residency by Investment programs. These programs, also known as Golden Visas, provide residency permits to foreigners who invest a certain amount of money in real estate, businesses, or government bonds. While Ireland claimed that it ended the program due to the “appropriateness and suitability of this program for cultural, social, and economic use,” the other two countries cited the housing crisis as the primary reason behind the decision.

On February 14, Ireland became the first EU country to terminate its Golden Visa scheme in 2023. The country’s Minister for Justice, Simon Harris, announced that the program was initially created to stimulate investment in Ireland during a time when the country was going through economic difficulties. Although Harris did not give a specific reason for ending the program, he mentioned that reports and findings by the EU Commission, Council of Europe, and Organisation for Economic Co-operation and Development on similar investment programs were taken into account before making the decision to scrap Golden Visas once and for all.

A day later, Portugal followed suit and ended its Golden Visa program as part of a broader package of measures to address the housing crisis in the country. The Portuguese Council clarified that it had decided to no longer grant new Golden Visas, while existing ones could be renewed only if they were real estate investments, intended for permanent housing, or placed on the rental market for a long time. The government emphasized that the program was not among the main factors for rising housing costs in Portugal and that the decision was made to combat real estate speculation.

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In the same week, the leader of Más País, a political party in Spain, submitted a bill to Congress to terminate the Spanish Golden Visa by purchase of real estate. If the bill is approved, articles 63 and 64 of Law 14/2013 will be modified, eliminating the purchase of real estate as a way to become a resident in Spain. While Spain is yet to follow Portugal and Ireland in terminating its Golden Visa program, it appears that it could be next.

According to Íñigo Errejón, leader of “Más País”, considers that these permits encourage “speculation” of housing prices in Spain. Additionally, he argues that these permits do not benefit the national economy and “displace local population,” generating a “very negative” chain effect on the housing market. “We must end this favoritism,” he emphasized.

The Golden Visa programs have been a controversial issue in Europe, with critics arguing that they create an uneven playing field for locals in the housing market, driving up property prices and contributing to gentrification. Advocates of the programs, however, contend that they attract foreign investment, create jobs, and boost economic growth.

According to a statement from Ireland’s Justice Minister Simon Harris, the Immigrant Investor Program has oversaw investments totaling more than 1.2 billion euros over a ten-year period. The program did not include passports, but after five years of stay in Ireland, investors and qualifying family members could seek for citizenship.