In the greatest decision taken by the Spain Congress, they have started taking measures to scrap the famous Golden Visa program. The focus is mainly to cancel the real estate investment pathway from the beginning of January 2025. This decision is on par with the new European trend to get rid of such programs, which is causing concerns about natural security risks, economic inequality, and affordability.
In the year of 2013, Spain’s Golden Visa was introduced, which allowed non-European Union nationals residency permits only after making a desired amount of investments in the country. The most common way to do this was by purchasing real estate, which was worth at least 500,000 Euros. From that time, around 11,000 investors came into the process, for which billions of Euros were generated for the benefit of the Economy, mainly for cities like Madrid, Barcelona, and Malaga.
Most of the Golden Visas, around 94 percent of which were issued in Spain, were connected directly with real estate investments. These are most concentrated in the high-demand urban areas. According to critical assessment, the property prices went up, which worsened the housing crisis for local residents. Recently, even the Prime Minister of Spain, Pedro Sanchez, highlighted that it is necessary to curb excess buying and make housing more accessible for locals.
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The world has seen that the European Commission has also requested its member states to get rid of the “golden passport” and other visa schemes, which are the reasons for the risks of money laundering and geopolitical concerns. Most recently, there has been a greater amount of participation by the Russian inventions after the Ukraine War started in 2022.
The Golden Visa program boosted majorly the luxury property markets. But it failed to reach the broader economic sectors. Due to this, the government is now trying to redirect the investment toward business development and capital transfers. This way there will be more sustainable economic benefits for the people of Spain.
Around 2,462 Golden Visas were issued for property investments in the year 2022, which exceeded around 500,000 Euros. It was a 60 percent increase in investments from 2021. But critics have always emphasized that this foreign investment is prioritized over local development. This was gross social inequality.
There were soaring property prices in cities like Madrid and Barcelona, which was responsible for many residents leaving their communities. This is why eliminating the real estate investment route is being implemented to curb these pressures
There was even criticism over the drawbacks of vetting the investors. This raised concerns about the potential misuse of money laundering and geopolitical influence.
At the moment, the legislation is still in a phase that requires approval from the Senate. However, most people believe that it will surely pass. Hence, once this real estate pathway ends, the other investment options that are under the Golden Visa program will remain available. These are mostly creating businesses or transferring capital. The main focus is to attract the kind of investors who will contribute directly to the economy without inflating the property markets.
The revision of the Golden Visa policy is not only happening in the country of Spain but also other countries like Portugal, Ireland, and Malta. They have also canceled programs of this kind following the guidelines of the European Union. This is a global move which is directed to cater the needs to the local housing and while addressing the ethical concerns which have been put to “residency for sale” models.
Hence, finally, to conclude, the decision to cancel the real estate component of the Golden Visa program is a commitment from all the countries of the European Union to balance economic growth with equal social status. As the country is working towards making housing more affordable, it also sets an example by conveying a message that how the other nations can also evolve the role of foreign investments in creating sustainable economies. Interested investors are also cautioned to explore alternative avenues for residency and monitor the legislative developments closely.
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