How will the end of the Golden Visa for the purchase of a property in Spain affect foreigners?

The Spanish Government has announced in the last week that it will withdraw the Golden Visa to foreigners who invest more than 500.000€ in real estate in Spain. But, let’s get to the point… How will the withdrawal of this precious residence visa affect the new owners who want to buy their home in our country?

In today’s article we are going to explain what the Golden Visa is, what was its origin and since when it has been granted to all those new residents in Spain. In addition, and using the new state law, we will explain which privileges will be lost by those non-EU foreigners who were thinking of investing in our country thanks to the purchase of a new property. Stay tuned!

In Spain, the Golden Visa program was established in 2013 with the aim of attracting foreign investment and stimulating the country’s economy after the financial crisis. This permit granted foreign citizens legal residency in our country upon making a real estate investment of more than 500,000 euros. Very interesting, isn’t it?

The truth is that the golden visa has been very attractive for citizens from countries outside the European Union. Investors from countries such as China, Russia and the Persian Gulf countries have seen in this residence permit the perfect excuse to diversify their investment portfolio and gain access to the European Union. Moreover, after an established period of residence, these investors could apply for permanent residence or even Spanish citizenship without too many problems.

The Spanish government has decided to withdraw the Golden Visa in order to treat access to housing as a basic right for all and not as a speculative business that only a few rich people can join. So, should we understand this government decision as a rejection of foreign investment in our country?

Some experts in the real estate sector believe that, by eliminating these residence permits for non-EU foreigners, a much more protectionist state is being created. However, as most of the luxury real estate agencies in Spain point out, this measure is not as worrying as it seems.

In fact, foreigners who decide to buy a property in Spain do not do so with the aim of obtaining a Golden Visa. Rather, they come to our country attracted by other reasons, such as the quality of life, security, educational offer and the great leisure offer. Therefore, the Golden Visa is and has always been an extra incentive for foreigners who wish to settle in our country. But, in no case, an essential requirement that influences in a direct way in their purchase decision.

The elimination of the Golden Visa in Spain brings with it (inevitably) certain negative effects, both for the country’s economy and for the real estate market and the attraction of foreign investors. We list some of these disadvantages!

Loss of foreign investment

Those foreigners who were thinking of investing in the purchase of a property in Spain in order to obtain residency in Spain, will no longer do so. Therefore, our country loses the opportunity to grow by not giving this inventive or attractive permission to new residents.

Reduction in job creation

Another disadvantage derived from the withdrawal of the Golden Visa is related to job creation. The foreign investment has facilitated, in many occasions, the creation of employment in sectors such as construction or tourism. However, if this flow of investment is reduced, the number of jobs in the sector will inevitably decrease as well.

Lower competitiveness compared to other countries

This measure could also make Spain less competitive compared to other European countries, which do offer similar programs to attract foreign investors.