Spain’s Congress Passes Bill to End Golden Visa Program by January 2025

Spain’s Congress of Deputies has approved a bill to terminate the Golden Visa program, with the cessation expected to take effect in January 2025. This program, established in 2013, granted residency permits to non-EU nationals who made substantial investments in Spain, particularly in real estate.

Background of the Golden Visa Program

Introduced during the economic downturn of 2013, the Golden Visa program aimed to attract foreign capital to stimulate Spain’s economy. It offered residency to individuals investing at least €500,000 in real estate, €1 million in Spanish companies, or €2 million in government bonds. The initiative successfully attracted over 15,000 investors, predominantly from China, Russia, and the United Kingdom.

Reasons for Termination

The decision to abolish the program stems from concerns about its impact on the housing market. Critics argue that the influx of foreign investment has inflated property prices, making housing less affordable for local residents. Prime Minister Pedro Sánchez emphasized the need to ensure that housing remains a right rather than a speculative commodity.

Legislative Process

The bill to end the Golden Visa program was approved by the Congress of Deputies on November 14, 2024. It is now pending review by the Senate for potential amendments before returning to Congress for final approval. The termination is anticipated to be effective from January 2025.

Implications for Investors

Prospective investors have a limited window to apply under the current program before its termination. Applications submitted prior to the law’s enactment will be processed under existing regulations. Existing Golden Visa holders are expected to retain their residency rights, but specific details will depend on the final legislation.

Market Reactions

The announcement has led to a surge in applications, as investors seek to secure residency before the program ends. In August 2024, the number of applications tripled compared to the same period in the previous year.

Conclusion

Spain’s decision to terminate the Golden Visa program reflects a shift towards prioritizing affordable housing for residents over attracting foreign investment through residency incentives. As the legislative process continues, investors and stakeholders are closely monitoring developments to understand the full implications of this policy change.