Europe turns its back on expat golden visas
Spain is the latest country to pull plug on scheme that allows wealthy non-EU citizens to ‘buy’ the right to residency, finds Liz Rowlinson
Aproperty in the sun – with an EU residency and tax perks thrown in – has been an inviting prospect for wealthy buyers. Now Europe is clamping down on golden visas. Against a backdrop of long-term EU opposition and Left-wing government policy changes, the writing is on the wall for Europe’s residency-through-investment schemes.
They were launched a decade ago to attract wealthy non-EU investors to help boost stagnant housing markets. But the schemes, combined with a pandemic-era boom, led to huge house price rises in some areas, pushing out locals. This week Spain became the latest country in Europe to announce that it is curbing or shutting down its golden visa programme.
This followed Portugal’s changes last year, and the ending of the Netherlands, UK and Irish schemes, plus last week’s amendments to the Greek model. What has been their impact?
In Spain, the scheme was introduced to help mop up the glut of unsold properties in the country’s deep property crash. But the scheme was a “total flop”, according to Mark Stucklin, of the website Spanish Property Insight. This was due to its €500,000 (£426,000) minimum investment – a relatively uncompetitive entry point at the time (compared to other countries’ schemes at around €250,000), and being incredibly bureaucratic to obtain. “It was tweaked to make it easier [but] the uptake has been a drop in the ocean compared to the 10,000 properties purchased each year by British buyers alone [without the visa],” he adds.
Only 185 British people have ever got a golden visa in Spain since Brexit came into force in 2021, according to the ministry of housing; three quarters of the 10,000 applicants since 2013 have been Russian or Chinese.
As with other southern European countries, the proportion of buyers that use these schemes is very low. Official sources show that only 0.25pc of real estate transactions in Spain since 2016 (10,186 of more than 4.1m) were used for golden visas. That is equal to 1.93pc of purchases from international buyers.
The scheme has helped Madrid become a hub of Latin American wealth, and 70pc of the golden visas have been used to buy property in the capital, Malaga and Barcelona.
Pedro Sanchez, the prime minister of Spain, said last week: “Today, 94 out of every 100 such [golden] visas are linked to real estate investment … in major cities like Barcelona, Madrid, Malaga, Alicante, Valencia or Palma de Mallorca that are facing a highly stressed market and where it’s almost impossible to find decent housing for those who already live, work and pay their taxes there.”
His culture minister, Ernest Urtasun, added that the golden visa was a “European disgrace”.
Among locals, it is not the golden visa itself that has caused problems, according to expat Valerie Evans, who moved from south London to Valencia in 2020. Instead it is issues around the “lack of affordable housing, gentrification, foreign buyers, low wages and Airbnb”. It is the same case in Malaga, where shortterm lets, rather than golden visas, have been the focus of discontent. Here, a sticker campaign has been blaming tourists and digital nomads using Airbnbs for reducing the supply of longterm rentals. According to Savills in Malaga, rather than golden visa sales – it is the lack of properties for sale (for a surging population) that is the main problem – like Barcelona.
Politicians are simply trying to win local support, says Stucklin. “The decision [to end the scheme] was pure politics. Golden visa purchasers are not property speculators, keen to make a quick buck. They want a long-term investment – if they sell the property they lose their visa.”
Although golden visa scheme holders only need to be in Spain for one day a year to renew their visa, most stay for up to six months a year (they are allowed to work and bring their families), says Alex Vaughan of estate agent Lucas Fox.
The impact of the scheme on property prices and transaction levels in Barcelona has been “extremely limited”, according to Vaughan, although there may be a “temporary rush of investors” to buy before it ends.
House prices in Spain increased on average by 4.2pc in 2023, defying the eurozone trend, according to the statistics office. “One of the factors leading to house price growth [and outpricing locals] is the impact of government regulation that 30pc of new developments in Barcelona are to be social housing,” adds Vaughan. “This has stalled construction, leading to a shortage.”
Both Stucklin and Graham Hunt of agent Valencia Property see American buyers being hit the most, having seen a rise in demand for golden visas since Covid. “Most British buyers don’t have €500,000 to spend on a property along with the financial resources [per year] needed to acquire the visa,” he says.
Last summer, Greece amended its golden visa, citing pressures on housing supply in certain areas. The relatively low minimum investment was raised from €250,000 to €500,000 in Athens and Thessaloniki, along with in-demand islands Mykonos and Santorini.
This week, the thresholds were raised again – to €800,000 in these areas, and to €400,000 in the rest of the country – for purchases completed after this year. “Many opposition parties are calling on the government to completely abolish the golden visa,” says Vicky Vamiedaki, tourism and travel editor at website News247.gr. “Rules should have been implemented in Athens long ago, both for this and for shortterm rental accommodation.” Under the new rules golden visa owners will not be allowed to do short-term lets.
Dion Gavriilidis, of Elxis – At Home in Greece, an estate agent, adds: “The popularity of Airbnb investments and the fact that urban apartments are often being sold at inflated prices solely to meet visa requirements has resulted in locals competing with foreign investors in mainland cities but also Chania, Heraklion [on Crete], Corfu Town.”
Since Brexit, he has seen a surge in interest from UK buyers looking to use the visa scheme to extend their stays – and lately a number of Israelis.
He expects another rush now that the scheme is tightening and European nations are turning off the taps of the golden visas.
According to data from the Ministry of Migration and Asylum, the number of Greek golden visas granted to UK buyers increased by 77.8pc to 370 between January and November 2023 – far higher than for the Spanish version.
In Crete, the most popular Greek island for foreign buyers, there is a mixed picture. At the high-end new marina development, Elounda Hills where properties start from €749,000, 35pc of buyers have applied for a golden visa, mostly from Asian countries, according to Ricardo Severini, the sales director. “The golden visa stimulates and injects much-needed capital into the local economy, which creates jobs, and spurs development.” Yet rising prices have priced out Cretans, says Miette Lauwers of agency Your Home in Crete. “There has also been a lot of abuse. We have clients who want to buy a house but never live in it or even visit it, just to get a foot in Europe.”
The EU has long suggested that these schemes foster corruption, tax evasion and money laundering, and in its attempt to align with EU requirements for membership, Montenegro closed its citizenship-through-investment scheme in 2022.
Cyprus is another nation that has curbed its liberal rules: its “golden passport” scheme was ended in 2020 after an expose by the Al Jazeera network. Portugal closed its real estate investment arm of the golden visa this year, after it exacerbated the housing crisis in cities, pushing up property prices.
But Charles Roberts, of agent Fine & Country, says: “The scheme created a big injection into the construction industry and helped revive Lisbon’s Chiado where locals were never keen to live, and it was only a ‘ripple’ in the whole property market. Now non-EU buyers – especially Americans – are investing €500,000 into a capital fund instead to get their visa.”
There are still alternative routes to residency in sun-drenched southern Europe, including a raft of new digital nomad visas. This week Italy was the latest country to introduce one, to add to Spain, Portugal, Greece, Malta and Croatia.
‘Most British buyers don’t have €500,000 to spend on a property needed to acquire a visa’