Golden Visa programs have long enticed wealthy individuals seeking residency or citizenship in Europe. Recent developments in Portugal and Spain have sparked debates and potential reforms, reshaping the landscape of these programs. In this blog post, we will delve into the changing dynamics of Golden Visa programs in these countries and explore the implications for international investors, particularly Americans who may now turn their attention to Golden Visa Spain.
Portugal’s Golden Visa program, once popular among foreigners, experienced a significant decline in demand. In the first half of this year, the scheme witnessed an overall 18% decrease in residency applications, with US citizens being the hardest hit, experiencing a staggering 37% drop. The termination of Portugal’s Golden Visa program on February 16 aimed to address the country’s housing crisis, resulting in a dwindling interest from potential investors.
China, Brazil, the United States, and Turkey were among the countries with the highest number of Golden Visas granted in Portugal. A total of 11,628 Golden Visas were granted in Portugal in the last 10 years, roughly double the amount as in Spain. However, concerns arose regarding the impact of the program on the housing market, as over 90% of investments were directed towards Portuguese real estate. Minister of Infrastructure and Housing of Portugal, Marina Gonçalves, emphasized the need to balance investment and housing market stability, highlighting the indirect effect of the program on housing costs.
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Meanwhile, Spain’s ‘golden visa’ program, which grants residency permits to individuals investing in properties valued over 500,000 euros, may soon be under scrutiny. Minister of Inclusion, Social Security, and Migration, José Luis Escrivá, acknowledges the necessity of reviewing the program’s requirements. The government is contemplating raising the minimum investment threshold or potentially eliminating the ‘golden visa’ program altogether, aligning with the proposals put forth by minoritary left wing political party Más País.
Más País argues that ‘golden visas’ foster housing price speculation, fail to benefit the national economy adequately, and result in the displacement of local residents. Concerns have also been raised at the European Union level regarding the lack of scrutiny regarding the origin of invested capital. Proposed reforms aim to ensure that foreign investments in real estate have a tangible impact on the economy without distorting the Spanish housing market.
It is worth noting that Spain is heading towards general elections scheduled for July 23, 2023. The outcome of these elections could potentially influence the fate of Spain’s Golden Visa program. Depending on the new government’s priorities and policies, there is a possibility that they may decide not to make any immediate changes to the program. The uncertainty surrounding the future of the Golden Visa program adds another layer of complexity for international investors, including Americans who are considering their options in Europe.
The shifting landscape of Golden Visa programs in Portugal and Spain highlights the ongoing debates surrounding their effectiveness and potential consequences. The termination of Portugal’s Golden Visa program has led to a significant decline in demand, particularly among US citizens. As a result, American investors may redirect their focus toward Spain’s Golden Visa program, especially if they find favorable conditions and stability.
The Golden Visa programs, once seen as pathways to investment and economic growth, are facing reforms to address the evolving needs and challenges of both countries. Only time will tell if Spain becomes the sole destination for Americans seeking Golden Visa opportunities in Iberian peninsula.
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