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Spain to axe ‘golden visas’ scheme

Spain to axe 'golden visas' scheme
Getty Getty
Spain to axe 'golden visas' scheme
Getty Getty

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Spain to axe ‘golden visas’ scheme: The “golden visa” scheme has been a contentious policy initiative in Spain, but the government has begun to phase it down.

This program, which was put in place in 2013 by the government of Mariano Rajoy, allowed foreign investors to get residency quickly, mostly by buying properties for €500,000 (£428,000) or more. The real estate market in Spain was hit hard by the eurozone crisis, and this led to its emergence as a solution.

Transparency International revealed that 6,200 investment visas were given up until 2023; however, some sources imply a greater quantity. Among those who reaped the benefits, Chinese citizens made up around half, with Russians, Iranians, Americans, and Britons following closely behind.

Investors who put €2 million (£1.7 million) or more into Spanish state bonds or new businesses were also granted residency privileges through the initiative, in addition to property buys. The government did admit, however, that just a small percentage—roughly 6%—of visas were issued for purposes unconnected to real estate acquisitions.

Housing must take precedence above speculative economic interests, and Prime Minister Pedro Sánchez reaffirmed his government’s resolve to dismantle the plan. He brought up the fact that most visas were linked to buying property in big cities like Madrid, Barcelona, and Valencia, which was making the housing problem worse and pushing locals out of their homes.

Extreme housing shortages were made worse by skyrocketing rents in some areas, like Ibiza in the Balearic Islands. To combat this, the government passed a bill last year to limit rent increases, especially in high-demand regions.

The decision to end the “golden visa” program is in line with the demands of Sánchez’s coalition government’s leftist supporters. Some worry that this change won’t go to the heart of Spain’s housing crisis. Apart from the impact of the golden visa program, Francisco Iñareta of the Idealista property portal emphasized the urgent problem of inadequate housing supply and rising demand.

The European Commission and other outside groups have pushed for more oversight of these programs throughout the European Union, claiming increased security concerns due to geopolitical tensions, most notably Russia’s actions in Ukraine. In 2022, the UK followed suit by ending its own plan that was similar, and then Ireland and Portugal revised theirs.

In a major policy change, the Spanish government has decided to end the “golden visa” program. This will help with housing issues and bring the country in line with wider EU laws on residency programs. Concerns about housing affordability and supply limits mean that this move’s effectiveness in addressing the root causes of the problem is still up for debate.

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