Pedro Sánchez has announced the end of the real estate ‘Golden Visa’, the controversial mechanism that has been in force for more than a decade through which foreign investors have been able to obtain a residence permit thanks to the purchase of real estate. In the last five years alone, since 2018, foreign millionaires have made real estate investments worth at least 4.8 billion euros as a way to obtain a golden visa in Spain, according to data obtained by through the Law of Transparency that detail the investments of more than 3,060 visas granted for the acquisition of real estate between 2018 and 2022.

In total, since Mariano Rajoy’s Government approved these ‘Golden Visas’ in 2013 and until the end of 2023, Spain has issued more than 6,200 visas for investment in real estate. Most of those requested are granted, because only around a thousand have been rejected, as seen in the following graph.

These are only data on visas granted to foreigners who did not previously reside in Spain and, therefore, the residence permits of people who were already legally in the country are not included, so the total numbers of residents with a ‘Golden Visa’ would be even higher.

If you go into the details of recent years, 2019 and 2021 were the years with the highest investment figures in exchange for obtaining residency. That is to say, there is a clear stoppage due to the pandemic but, in the year before the spread of the coronavirus, more than 1.9 billion were invested in real estate in this way. And a year after the outbreak of COVID, more than 1,300. However, in 2022, that number fell to 842 million.

It must be taken into account that, in 2022, Russia invaded Ukraine and there was a brake on Russian citizens being able to achieve residency through this investment vehicle.

Despite this limitation, which has been in force for two years, if you look at the data since 2018, Russian citizens have allocated more than 400 million euros to acquire real estate in Spain in exchange for residency. Russian citizens, along with Americans, Mexicans, Chinese or Iranians, are in the ‘top 10’ of countries with the most money invested in a real estate ‘Golden Visa’.

In fact, as seen below, two out of every three ‘Golden Visa’ granted since the law came into force (2013 to 2023) have been for people of Russian and Chinese nationality, according to updated data obtained by the organization Transparency. International. Russians and Chinese are far ahead of other nationalities, such as Saudis, Venezuelans, Iranians, Egyptians or the British. In the latter case, they correspond to post-Brexit data from February 2020.

The Government assures that investments in real estate have focused on cities such as Barcelona, ​​Madrid, Málaga, Alicante, Palma or Valencia, where the housing market is more tense.

The data to which has had access indicate that there have been investors who have paid out millions of dollars to obtain residency. The Law says that the minimum amount to buy is 500,000 euros but there are 16 people who have spent more than five million euros in this process to achieve the ‘Golden Visa’, according to the data contained in the Ministry of Foreign Affairs and obtained through the Transparency Law.

Four of these mega-investors have allocated more than 500 million euros. In the data analyzed neither their name nor the specific investment they have made appear, so it could be the purchase of one or several buildings with a high market valuation. Two of these people are of American origin and both would have allocated more than 700 million euros.

What is a ‘Golden Visa’?

They are a controversial mechanism that was launched in the last financial crisis to attract capital to Spain. In reality there are several tools under the idea of ​​a ‘residence visa for investors’. One is linked to the aforementioned purchase of properties, one or several, with the requirement that the total value exceeds 500,000 euros. A figure that has not changed in 11 years despite the fact that the price of apartments has not stopped rising since then.

Another way to achieve a ‘Golden Visa’ is to invest more than two million euros in public debt or more than one million in bank deposits or company shares. At the moment, the Government has not clarified whether these last options will be maintained for foreign investors.

And there is a third, another assumption is included, that “a business project” is launched in Spain that “is considered and accredited as being of general interest”, according to the Law of Support for Entrepreneurs and their Internationalization. For it to be so, it is assessed that it meets one of these three conditions: o that it creates jobs; involves an investment with a significant socioeconomic impact in the geographical area where it is developed; or entails a relevant scientific or technological contribution. Some assumptions that have to have the endorsement of the Ministry of Economy.

There is another nuance, because the investment can also be channeled through a company, a legal entity, as long as it is not domiciled in a territory that is considered a tax haven. The foreign investor who wants this residence permit must have, directly or indirectly, the majority of its voting rights and the power to appoint or dismiss the majority of the members of its administrative body, according to the aforementioned law. .

In addition, the Startup Law, the Law on Promotion of the Ecosystem of Emerging Companies, approved in 2022, contemplates that “foreigners who request to enter Spain or who, being holders of a stay or residence authorization or visa, intend to start, develop or direct an economic activity as an entrepreneur, may be provided with a residence authorization for business activity, which will be valid throughout the national territory and will be valid for three years. It adds that “once this period has expired, they may request the renewal of the residence authorization for two years, being able to obtain permanent residence after five years.”

A mechanism in question

The continuity of these golden visas has been in question for months, especially because a succession of countries have been abandoning this tool to attract investors. This is what Portugal did months ago, which, like Spain, took this path to try to get out of the last financial crisis. Canada also limited the purchase of houses by foreigners – although temporarily – to try to alleviate price pressure in the real estate market.

“It is an instrument that was launched at another time, when the housing market situation was different,” acknowledged the Minister of Housing, Isabel Rodríguez, a few weeks ago in an interview with “Then construction stopped and homes were not sold. Since we arrived at the Ministry we have started, with the Ministry of Economy and the Ministry of Inclusion, Social Security and Migration, an analysis to find out how it is affecting housing in our country, what influence it has on the real estate market. When we have the data, we will analyze it following the recommendations of the European Commission,” she added.

Brussels has been very critical of these mechanisms. In the fall of last year, the Commission published a report indicating that several Caribbean countries had sold visas to nearly 88,000 people from Iran, Russia or China, in exchange for investments. Furthermore, in 2020 the Commission launched infringement proceedings against Cyprus and Malta for having gone further and granting passports – not residence permits – to foreign investors. Cyprus put an end to this practice, while Malta has been taken before the Court of Justice of the EU and is the only country that has this type of ‘Golden Passport’ in place.

Saying goodbye to the ‘Golden Visa’ for the purchase of houses has been a demand of Sumar since the beginning of the legislature. In the investiture debate of Pedro Sánchez, Yolanda Díaz already announced that it was going to be one of the priorities of the Government partner. “We are going to regulate the main speculation hole in the cities, seasonal rentals; to build 20% more housing and social housing. And we must put an end to the ‘Golden Visa,’ she stressed from the tribune of the Congress of Deputies.

“It is good news, although we have to see how it comes to fruition,” explains Elena Pozo, an expert immigration lawyer. “But the ‘Golden Visa’ should not have existed. At the time they were approved, they were intended to be a temporary solution, but they had to be eliminated because they continued to accentuate discrimination between first-class and third-class migrant citizens.” Pozo also points out the rest of the cases in which the permit can be achieved through an investment. “They should remove all of them, because we are not aware that there is sufficient verification of where that capital comes from. Some type of money laundering can be promoted, regardless of the fact that there are already other types of advantages because you can regularize yourself through roots,” she argues.


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