During the 16th century, the Spaniards desperately sought the city of El Dorado without success, so four centuries later decided to create it in their own country to attract fortunes around the world. Since its implementation in 2013, the Golden Visa has been a subject of constant controversy. This measure, designed to attract foreign investment to the country, allows non -community citizens to obtain residence in Spain in exchange for a significant investment, which is generally channeled in real estate.
In a world where competition for attracting capital is fierce, Spain offers an interesting proposal: residence in exchange for a minimum investment of 500,000 euros in real estate, or one million euros in bank deposits, or two million euros in public debt. This represents an opportunity for access to the Spanish market in particular, but also to the Schengen area as a whole.
The motivation that underlies the different countries to apply Golden Visa is like a dynamic measure of wealth. On the contrary, the detractors of this argue that it is only a new factor that encourages speculation and inequalities.
In cities such as Madrid, Barcelona, Málaga or Valencia, the Golden Visa has brought buyers willing to pay high prices for luxury properties, which has generated, in turn, activity in the construction, the restoration of buildings and high -level tourism; But also, and to the extent that only people with high purchasing power can be hosted, one of the most obvious effects has been the increase in prices in the real estate market, especially in large cities and in the coast, making access to housing difficult for local citizens.
From 2017 to 2023, about 14,576 Golden Visas were granted in Spain. Of these, almost 23%
Assuming that all 14,576 approved requests were all directed to invest in the purchase of real estate, and assuming the legal minimum to access the Golden Visa (€ 500,000), the total investment amount of the Golden Visa would have been about € at least € 7,300 m, that is, an average of about € 1,040 m per year.
In the same period of time, public investment for housing construction was almost € 14,000m, that is, about € 2,000m per year; While the estimate of private investment for housing construction only by 2024 was about € 10,500 m.
The case of housing in Spain is a reason for a more exhaustive and deep analysis than the one referred to in the previous paragraphs, and especially of development in another article, but a priori, it seems that the problem of access to housing in Spain comes more from the side of the supply than by the demand, so it is true that the granting of Golden Visas could influence the rise of housing prices in prime areas of Madrid, Barcelona, Barcelona, Barcelona, Barcelona, Barcelona, Barcelona, Barcelona, Barcelona, Barcelona, Barcelona, Barcelona, Barcelona, Barcelona, Barcelona, Barcelona, Barcelona, Barcelona, Barcelona, Barcelona, Barcelona. Not in the rest of the Spanish real estate market.
Analyzing the future of the Golden Visa in Spain, the Spanish government has recently raised the possibility of reforming or even eliminating the Golden Visa to stop real estate speculation.
Our Portugal neighbor has already restricted its Golden Visa program limiting the purchase of homes in the main cities to avoid price inflation. Spain could follow a similar path, demanding that investments go to productive sectors instead of the real estate market.
The consequences that the end of the Golden Visa could entail in Spain, in regards to the real estate market, its elimination could cause a reduction in the demand for premium properties, especially in large cities and coastal areas, which would lead to a slowdown in price growth in these places and type of housing, but it would have a very limited impact for the rest of the Spanish real estate market. Because, as I said previously, the structural problem of housing in Spain comes on the side of supply, and not of demand, and acting on a type of demand (the Golden Visa) does not solve as a whole the serious existing problem.
What would be clear is that, if an alternative incentive is not offered, Spain could lose competitiveness in front of other European countries that maintain similar programs, such as Portugal with restrictions, Greece, Malta and Cyprus, which also grant the right to freely move through the Schengen space, including Spain.
Possible alternatives to the Golden Visa to attract foreign investment would be to encourage investments in strategic sectors, grant visas for entrepreneurs and start-ups, or the creation of residence programs based on employment and talent with the aim of attracting highly qualified professionals.
Can the Golden Visa, like the gold only one was an illusion?
Rafael Rabat Martínez
Founding partner
Norz Patrimonia