What effect will the removal of the Spanish Golden Visa have on the market?

According to some real estate experts, the termination of Spain's Golden Visa Program will not deter affluent internationals from purchasing luxury homes, as their primary focus is on lucrative investments rather than residency.

Spain has announced the end of the Golden Visa Program as a measure to better address the housing crisis.

The most popular aspect of this program is the real estate investment option, which grants residency in exchange for buying properties valued at €500,000 or more.

Additionally, Spanish authorities have revealed plans to levy a tax of up to 100 percent on the value of properties purchased by non-EU nationals following the decision to abolish the Golden Visa Program.

In this context, immigration and property lawyer Maryem Essadik, CEO of Barcelona-based Marfour Law, told the Local Spain that "this doesn’t make much sense because foreign investors are competing for housing that’s out of the reach of middle-class or low-income locals."

Despite the new changes announced by the Spanish government, real estate experts informed the Local that eliminating this visa option will not make high-end properties more accessible or affordable.

Real estate experts cited examples from Madrid and the Balearic Islands, highlighting that these two regions, along with Valencia and the Costa del Sol, are where most of Spain's luxury properties are acquired.

José Miguel Artieda, President of the Official College of Real Estate Agents (APIS) of the Balearic Islands, told the Spanish newspaper El Confidencial that "there is excess demand in the Balearic archipelago for the purchase of luxury and super-luxury housing."

100% Tax on Property Purchases From Non-EU Nationals

The Prime Minister of Spain, Pedro Sánchez, recently announced plans to impose a tax of up to 100 percent on the value of properties bought by nationals from non-EU countries.

The tax burden they will face upon purchase will increase up to 100 percent of the property's value, similar to countries like Denmark and Canada.

Prime Minister of Spain, Pedro Sánchez

The Spanish PM highlighted that in 2023, nationals from non-European Union countries purchased a total of 27,000 properties in Spain, not for residence but as a means to profit.

Spanish authorities aim to limit the expansion of short-term rentals to better manage the housing crisis.

The Spanish PM stressed that housing is one of the most significant challenges in European countries. Sánchez added that housing should become a right and not the foundation of the welfare state.