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Spain has become the latest EU country to scrap “golden visas” that attracted thousands of foreign property investors, as soaring property costs make the programs politically toxic.
Prime Minister Pedro Sánchez said his cabinet would take the first steps on Tuesday towards abolishing visas, which were introduced in 2013 and have allowed investors who have spent at least 500,000 euros on real estate to gain the right to live in Spain.
“We will take the necessary measures to ensure that housing is a right and not just a speculative business,” said Sánchez, head of a Socialist-led coalition government.
Spain’s decision follows moves taken last year by Portugal and Ireland to abolish golden visas linked to the real estate sector. In all three countries, the programs were introduced to attract foreign investment and fuel recovery from financial crises driven by the collapse of real estate markets.
The European Commission has been critical of golden visas, citing security risks and concerns about possible corruption, money laundering and tax evasion. In 2022, he called on member states to address such risks and end the even more controversial golden passport schemes, particularly in Malta and Cyprus, which offer not just residency but citizenship.
In Spain, many of the roughly 10,000 golden visas granted over the past decade had gone to Russian and Chinese citizens, a government official said. They allow recipients to live in the country for three years.
Economists do not see Spain’s golden visas as the main reason for rising property prices, but since last year Sánchez has been under pressure to end the program from left-wing members of his coalition concerned about the soaring real estate costs.
Although golden visas can be obtained through various forms of investment, Sánchez said that 94 out of 100 granted in Spain were linked to the purchase of property. They were concentrated in tourist centers including Barcelona, Málaga, Alicante, Valencia, Madrid and Palma de Mallorca, she said.
“These are the cities that are facing a very stressed real estate market, where it is almost impossible to find decent housing for those who live and work there and pay taxes every day,” Sánchez said.
“This is not the country model we need, that of speculative investments in housing, because it is a model that leads us to disaster and above all to lacerating inequality”.
Spanish MPs will first have to approve a change to the law for the golden visa to be abolished.
In a study published last year, the Spanish division of Transparency International said the country granted 2,700 visas to Chinese citizens and more than 1,100 to Russians.
While Ireland completely abandoned its program last year, Portugal closed the property route but allows people to obtain golden visas through other forms of investment. Existing golden visas remain valid in both countries.
Additional reporting by Laura Dubois in Brussels