The Spanish government officially suspended the 'Golden Visa' program starting April 3, 2024. This program allowed foreign investors to obtain residency in the country by making a certain amount of investment. Particularly, purchasing real estate for more than 500,000 euros was considered the most sought-after option of this program.
Why was the program canceled?
According to Spain's Minister of Housing and Urban Development, Isabel Rodriguez, this decision was made to protect the interests of the local population. In recent years, the demand for the real estate market by foreign investors has led to a sharp increase in housing prices. This has limited the opportunities for many Spaniards to purchase homes.
"The measures taken by the Spanish government are similar to the decisions made by other European countries like Ireland and Portugal. The European Commission strongly recommended in 2022 that all member states review their citizenship and visa systems available for investors," the official statement said.
Who will be affected?
Applications from foreign investors who applied for the 'Golden Visa' before April 3 will be processed according to the previous rules. Additionally, residency permits obtained through the program will continue to be valid until their expiration.
Spain introduced the 'Golden Visa' program in 2013. This program was available not only to those who invested in real estate but also to those who invested at least 1 million euros in Spanish company shares or 2 million euros in government bonds. However, real estate was the most common option.
In 2023, the share of real estate purchased by foreigners in Spain reached a record level of 18%. This was one of the main factors contributing to the rise in housing prices for the local population.
Attitudes towards 'Golden Visa' programs in Europe
Besides Spain, other European countries are also reviewing their 'Golden Visa' or 'Golden Passport' programs. For example, in November 2024, the Cypriot government revoked the 'golden' passports of Russian and Ukrainian billionaires. These passports were granted to those who made significant investments in the Cypriot economy. However, due to issues related to corruption, fraud, tax evasion, and criminal activities, several foreign investors were deprived of this privilege.
Similarly, Ireland and Portugal have also decided to terminate their similar programs. All these decisions are related to the European Commission's recommendations to abolish the citizenship by investment system in the European Union.
New opportunities for investors in Spain
The Spanish government is working on a new economic strategy to attract foreign investors. This strategy aims to create favorable conditions for foreign investors while also protecting the interests of the local population. Therefore, no official information has been provided yet about a new program to replace the 'Golden Visa'.
However, Spain continues to be an attractive country for investment. Investments in various sectors of the economy are supported by the government, especially those focusing on technology and innovation are given particular attention.
The decision to suspend Spain's 'Golden Visa' program was made to protect the local real estate market and the interests of the local population. This decision will change the conditions for foreign investors to invest in Spain, but the government is working to create new opportunities for them. Other countries in Europe are also abolishing similar programs, indicating the European Union's determination to strictly regulate the citizenship by investment system.
