‘Golden visa’ scheme axed to curb property speculation

Spain will axe its so-called golden visa scheme under which foreign investors get residency in return for a ¤500,000 (HK$4.25 million) investment in property, to curb the speculation blighting many cities, Prime Minister Pedro Sanchez says.

The move, set to be approved at a cabinet meeting yesterday, would allow the government to fight against “speculative investment” in property, which was preventing many young people and families from accessing housing, he said.

The scheme, which was introduced in 2013 when the economy was struggling and Spain wanted to attract foreign capital, offers non-EU investors a three-year work and residency permit in exchange for the investment in property or a Spanish company.

“Today, 94 out of every hundred visas of this nature are linked to property investment that is concentrated in large cities,” he said, pointing to Barcelona, Madrid, Malaga and Alicante in the south, Valencia in the east and the Mediterranean Balearic Islands.

Such areas were experiencing “a lot of tension in the housing market, making it nearly impossible for those living, working and paying taxes there to find decent housing,” Sanchez said.

In recent months, several countries in southern Europe that set up similar schemes during the financial crisis have tightened the rules or dropped the offers to ease housing crises.

In February last year, Portugal ended its golden visa programme which had significantly pushed up house prices, and late last month, Greece tightened the rules on its own scheme, raising the required investment to as much as ¤800,000.

These visas are “a European disgrace. You can’t grant someone a residency permit just because he’s a millionaire”, said Culture Minister Ernest Urtasun who is also the spokesman for the radical left-wing Sumar party, part of

Spain’s Socialist-led ruling coalition.

In 2019, Brussels urged member states to crack down on the schemes and warned that they were likely to facilitate corruption and money laundering.

From the start of the golden visa scheme in 2013 until November 2022, Spain issued almost 5,000 permits, government figures show.

Chinese investors top the list followed by Russians who invested more than ¤3.4 billion, according to a 2023 Transparency International report that questioned whether authorities investigated the origin of the funds.