As many of you may have heard, the Spanish Government announced a few days ago its intention to abolish the Golden Visa in the coming months.
Beyond its possible implications at a legislative level or for the real estate market, the truth is that we are talking about a term that was also unknown to many people in our country and which has recently been all over the television news and written media.
Below, we review the role of the Golden Visa and comment on some of the implications that this change may have.
What is the Golden Visa and what are its benefits for foreigners?
Before continuing, it is useful to remember the origin and purpose of the Golden Visa.
In this case, when we talk about the Golden Visa, we are referring to the effective residence programme in different countries of the European Union that offers the possibility of obtaining a residence permit to foreign investors who make a significant investment in the host country.
In Spain, the Golden Visa is part of the Law to Support Entrepreneurs and their Internationalisation, which allows foreign investors to obtain Spanish residency in exchange for making a specific investment, such as the acquisition of real estate for a minimum value of €500,000.
The benefits of obtaining the Golden Vida include the possibility of residing legally in Spain in this case or being able to obtain residency with all its advantages, such as access to our public health and education systems, or travelling without restrictions in the Schengen area.
How many Golden Visas have been granted in Spain to date?
One of the questions that have been addressed in the face of the elimination of the Golden Visa has been the need for this approach due to its relation to the saturation of the Spanish real estate market and the increase in both rental and purchase prices of housing.
It is true that, over the last few years, there has been a boom in the number of homes bought by foreigners, either as a first or second home, or as an investment.
But can we relate this saturation to the granting of the Golden Visa?
According to data provided publicly by the Spanish Ministry of Housing and Urban Agenda, in the 10 years that have passed since the programme came into force, around 15,000 visas have been granted, practically all of them for the real estate investment required, with Chinese, Russian and British nationalities standing out as the main applicants, especially in large urban centres such as Madrid, Barcelona, Malaga, Alicante, the Balearic Islands and Valencia.
Can the elimination of the Golden Visa really have a negative impact on the real estate sector?
As we have mentioned, the main debate on the elimination of the Golden Visa is based on its relation to the situation of the real estate market in Spain.
On this point, we see that there is some debate about the impact that this abolition may have.
Naturally, for the real estate sector, this is a controversial decision, as it could affect the level of investment both in the purchase and sale of properties and in the investment necessary for new urban development projects.
However, there are many experts who believe that, given the number of Golden Visas that have been granted over the years, the impact will be minimal and very insignificant for the real estate market.
As you can see, it is still too early to be able to speak with certainty or make predictions about the impact of the abolition of the Golden Visa for the Spanish property market.
We at MAM Solicitors will continue to keep you informed of any updates on legislative issues relating to the real estate market.
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