Spain’s golden visa program set to end in April 2025

Spain’s Golden Visa program has attracted thousands of investors worldwide since its inception in 2013. The program offers non-EU nationals the right to apply for legal residence by purchasing real estate in Spain for at least 500,000 euros. This is just one of the pathways of the program.

After over a decade, the real estate investment route remains the most sought-after among foreign high-net-worth individuals (HNWI) seeking legal residence in Spain. However, it’s about to end.

On Apr. 8, 2024, during a meeting in Sevilla, the president of the Spanish government announced that the program would be terminated. The proposal was formally introduced before Congress the following day.

The government’s decision to end the program, along with the support of its political allies, did not come as a surprise. Left-wing congressmen have been arguing that the program is one of the main drivers of skyrocketing real estate prices in Spain in recent years. Spain’s decision to terminate the program is part of a broader trend across Europe, where golden visa programs are being phased out due to their contribution to soaring property prices.

According to the Housing and Urban Agenda Department, 14,576 golden visas have been granted since the program began eleven years ago. The main groups of foreign investors come from China, Russia, the United Kingdom, the United States, Ukraine, Iran, Venezuela and Mexico. These investors are primarily buying properties in Spain’s major cities, including Madrid, Barcelona, Malaga and Valencia. Most South American are acquiring properties in the main cities, such as Madrid, Valencia and Barcelona, while the other foreign nationals prefer to invest in the South, particularly in the Costa del Sol, where they often relocate.

THE REAL IMPACT OF THE GOLDEN VISA ON SPAIN’S HOUSING CRISIS

The government has stated that terminating the program will prevent the continued increase in housing prices. However, the announcement has been criticized as a populist measure. The total number of properties sold during the same period represents less than 1% of the golden visas granted. This data suggests that the program has had little to no impact on the overall increase in Spain’s real estate market.

Another recent measure to address the housing problem was introduced by the mayor of Barcelona, one of the most visited cities in the world. Over the next five years, he eliminated short-term rentals. The mayor announced that the 10,101 tourist licenses allowing short-term rentals through Airbnb and similar platforms will not be renewed after November 2028.

There is no doubt that Spain faces a housing problem, partially due to the influx of foreign nationals wanting to reside and invest in the country temporarily. This trend is also evident in major global cities, including New York, Miami, San Francisco, Lisbon, and Paris. In Madrid, for example, the city has become the new Miami, as reported and promoted by the media worldwide. Since the pandemic, Madrid has experienced a tremendous surge in tourists who have fallen in love with the city and decided to purchase second homes.

However, not all the blame lies with foreign nationals who want to enjoy the lifestyle and diversify their capital in Spain. The lack of reliable data, such as price comparisons from recent sales (like the MLS system in the United States), allows sellers to set prices freely without market guidance, hoping that a wealthy investor will be willing to pay, often much more than the actual market value. Property owners' and agents' speculation has also been a significant factor behind the housing crisis in Spain.

THE ENTIRE INVESTMENT PROGRAM WILL BE ELIMINATED, NOT JUST REAL ESTATE

The golden visa program in Spain offers three pathways to obtain legal residence, including the real estate investment option for a minimum of 500,000 euros. Although the program's termination is intended to control rising property prices, the other investment routes will also be eliminated.

The other two routes to obtain residence through the program are:

Depositing at least 1 million euros in a Spanish bank; or

Purchasing government bonds for 2 million euros or investing 1 million euros in shares of a Spanish company.

CUT-OFF-DATE AND CURRENT INVESTORS

The State Official Bulletin (BOE) eliminating the golden visa program was published on Jan. 3, 2025. It provides a 90-day grace period. Thus, the last date that investors can submit their applications will be Apr. 3, 2025.

Current investors will be able to maintain and renew their residence applications.

Main Attractions of the Spanish Golden Visa Program

Offers foreign investors a decision on their legal residence applications within 20 working days.

A straightforward and fast track to Spanish citizenship, especially for those investors from Latin America. After only two years of legal residence in Spain, investors and their family members can apply for Spanish citizenship. For other nationalities, the waiting period is typically ten years.

Foreign nationals are not required to live in Spain to renew and maintain their legal residence.

NON-LUCRATIVE VISA: THE BEST SECOND OPTION

Terminating the golden visa program will have short- and long-term effects on the flow of foreign investments. However, Spain will remain an attractive destination for investment and living due to its high quality of life and relatively low cost of living, especially compared to other European countries. Foreign nationals planning to relocate to Spain must secure an alternative path to obtain legal residence. The non-lucrative visa is often the second-best route for medium -and-high-HNWIs. However, foreign nationals are required to live in Spain for at least six months per year under this option.

For those still interested in the golden visa option, the recommendation is to speed up the process of acquiring a real estate property and file their applications for legal residence before April 3, 2025.