Golden Visa Programs Lose Luster in Europe
When Ana Jimena Barba, a young doctor, began working in Madrid last year, she moved in with her parents half an hour outside the city until she could save enough to buy her own home. But when she looked at houses in the same village, almost everything was priced over 500,000 euros.
The amount — nearly 20 times more than the average annual salary in Spain — happens to correspond to the cost of the country’s “golden visa,” a program that offers residency to wealthy foreigners who buy real estate there. After a decade, the program has reeled in billions of euros in investments, but it has also helped fuel a wrenching housing crisis for Spain’s own citizens.
“There’s nothing I can afford,” said Dr. Barba, an allergist. “If foreigners inflate the prices for those of us who live here, it’s an injustice.”
Faced with growing pressure to address its housing crunch, Spain said last month that it would scrap its golden visas, the latest in a wider withdrawal from the program by governments around Europe.
Half a dozen eurozone countries offered the visas at the height of Europe’s debt crisis in 2012 to help plug gaping budget deficits. Countries that needed international bailouts — Spain, Ireland, Portugal and Greece among them — were especially desperate for cash to repay creditors.
Countries reaped a windfall: Spain alone has issued 14,576 visas linked to wealthy buyers making real estate investments of more than €500,000. But the prices they can afford are squeezing people out of a market that had already been highly inflated by the rise of Airbnb and the draw of Wall Street investors.
“Access to housing needs to be a right instead of a speculative business,” Pedro Sánchez, Spain’s prime minister, said last month as he announced the end of the country’s golden visa program.
The visas make it easy for people outside the European Union to buy the right to temporary residency, sometimes without having to live in the country. Investors from China, Russia and the Middle East flocked to buy real estate through them. In recent years, British nationals have snapped up homes in Greece, Portugal and Spain, as have an increasing number of Americans.
But golden visa programs are now being phased out or shut down around Europe.
Portugal, which has reaped over €5.8 billion in investment from the visas, modified its program in October to remove real estate as an investment to reduce speculative buying and cool an overheated housing market. An influx of foreigners has displaced thousands of low-income Portuguese citizens in cities like Lisbon.
The government in Lisbon is trying to fix the affordable housing issue with new rules that would require landlords to rent empty flats to families, cap rents and convert some commercial real estate to housing.
After Russia’s invasion of Ukraine, E.U. officials urged governments to end golden visas, warning they could be used for money laundering, tax evasion and organized crime. Ireland shut down its program last year, in part to address concerns that Russian nationals were laundering money.
Greece raised €4.3 billion in investment from golden visas from 2021 to 2023. The country is raising its foreign investment threshold to €800,000 from €500,000 in the Athens area and on popular islands including Mykonos and Santorini. Kyriakos Mitsotakis, the prime minister, acknowledged severe housing shortages and pressure on rental markets, especially around Athens, but said the government still wanted to draw investors.
Laura McDowell, an agent at the Athens-based Mobilia real estate agency, said shortterm rentals had made rents unaffordable in city centers, and the problem was worsened when investors from numerous countries converted homes purchased through golden visa programs to vacation rentals, further squeezing the supply of affordable housing.
Today, entire apartment blocks even in once undesirable zones in and around Athens are owned largely by foreigners.
“Greeks have been priced out,” Ms. McDowell said.
The Spanish government plans to construct 40,000 social housing units for people with limited resources as part of a broader plan to restore affordable lodging.
But it is uncertain that will help people like Dr. Barba quickly. Rents in Madrid jumped 15 percent in 2023. A 3.2 percent inflation rate has added to the strain.
“It would take years to save up enough to put down a deposit on a home,” Dr. Barba said. “Buying a home is just a dream.”