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Spain says goodbye to golden visas. In the last decade, it has granted 14,576
golden visas
or residence permits to non-EU citizens who have invested at least 500,000 euros in the purchase of a home, without taking into account charges and mortgages. The Government is going to eliminate them because it considers that these visas linked to real estate investments have stressed the market and have contributed to the increase in prices and speculation, something that companies in the sector question.
Chinese investors, followed by Russians, are the ones who have benefited the most from this express residence permit since it was launched in 2013. In total, 2,712 investors of this nationality have obtained the gold card from then until 2023, according to a report by Transparency International. Madrid, Barcelona, Málaga, Alicante, the Balearic Islands and Valencia have concentrated 90% of all approved authorizations.
Two weeks ago, Diego Vázquez, CEO of the real estate company Mr. House, closed the latest operation linked to a
golden visa
by a Chinese investor, “a large industrialist who has a battery factory in his country and wants to set up a warehouse in Spain". He has bought a chalet in Boadilla del Monte (Madrid) for 975,000 euros to live in with his family.
Vázquez tells the case of another investor who has acquired two homes in Parla (Madrid) valued at 300,000 euros to rent for 750 euros per month and a third to reside in for another 300,000 euros, thus exceeding the required limit. “I wanted a house close to his business.” Of the two hundred homes that this agency sells each year to Chinese citizens, 5% are linked to a
golden visa
, a procedure that they outsource. Three Asian salespeople work here, something essential to overcome the language barrier and give confidence to these clients, who are picked up at the airport and invited to a bullfight or a soccer match.
Those who request the golden visa for real estate investments are usually businessmen at the head of companies in China who come to Spain to diversify. “They seek to establish themselves to implement their businesses, sell Chinese products in Europe legally, withdraw capital from the country to reduce risks in the event of possible economic contingencies in their country and obtain a Schengen visa that facilitates their mobility; They are all advantages,” says Jorge Martín, partner of the Spanish law firm BGI-LAW. In his opinion, the elimination of these permits will have a negative impact on investment in Spain, but “the businessman who wants to invest here will continue to do so. The
golden visa
made things a lot easier; Now it will be a little more complex.”
Eduardo Cires, partner at Inmobiliaria Liberty Barcelona, is more pessimistic: “If they want to reside in the
Schengen
area they will have to invest in Greece or Italy; in Spain, prohibited.” In this agency specialized in the Chinese community in Catalonia, they tell how investments are made: “The sale of an apartment in Beijing or Shanghai easily provides liquidity of one million euros, with which they acquire a large apartment or penthouse in the center of Barcelona or a house with a garden in coastal towns like Sitges. Additionally, they usually invest in the purchase of commercial premises to rent them.”
For real estate agencies specialized in the Chinese market, the measure will not cause a major setback. Their reasoning is that they will fill the gap with another nationality. Although they do not believe that it will be the solution to the housing problem. “They make a lot of noise because they are a residence card for the rich, but they are not going to have the expected impact,” warns Jesús Xu Chen, director of operations at Bafre Inmobiliaria, with offices in Madrid, Beijing and Shanghai. The client who seeks investments through this agency to obtain the visa usually buys three apartments that cost between 180,000 and 200,000 euros each. “They rent them out and pay in cash,” says Xu Chen. “They spend the minimum, it is a profile that has nothing to do with the Latin American one.”
At the Carbray International law firm, however, they manage these permits for an investor with greater purchasing power. “They buy luxury homes for several million euros and some even ask for a mortgage so as not to become decapitalized,” says Lorenia Aquino, business and sales director of the firm. In recent years, Málaga has been in its sights, in addition to Madrid, Marbella, Barcelona and Valencia. In this case, they are looking for large homes to bring the whole family and, in fact, some opt for the famous and luxurious urbanization of La Finca, in Pozuelo de Alarcón (Madrid). In the luxury firm Engel & Völkers, the Chinese investors who requested
a golden visa
concentrated their operations in Barcelona. “The type of home they bought was an apartment in the Eixample neighborhood of about 120 square meters and three bedrooms. The average price was 668,000 euros.” Only 2% of all operations of this agency in 2023 were with a golden visa. The citizens who most required them came from China, Russia and Iran.
A measure to mitigate the 2008 crisis
This week the Government has begun the procedures to eliminate the
golden visa
, an instrument that the Government of Mariano Rajoy approved in 2013 - regulated in Law 14/2013 on entrepreneurs and their internationalization - with the aim of attracting foreign capital to Spain and thus mitigate the effects of the Great Recession of 2008. Since then, to apply for a residence permit in Spain, foreigners not resident in the European Union had to make a significant investment: in real estate, in financial assets or with a business project. Around 94% of visas were linked to real estate investments. Hence, the Government only eliminates,
a priori,
the latter. Spain thus follows the path of other countries such as Portugal, Ireland or the Netherlands, which have already eliminated the mechanism after repeated warnings from Brussels, which it considers to be an easy way to launder black money.
The alarm light has gone on in Spain because in the last two years
golden visa
grants for foreign real estate investments have doubled. In 2022, 2,017 visas were granted, 3,217 in 2023 and in the first two months of this year 424 have already been granted. “In those two years, a third of all permits had been granted and the cheapest was being invested, 500,000 euros , which is the price of an apartment in Madrid for a middle-class family,” said Isabel Rodríguez, Minister of Housing, this week in La SER. The minister is aware that this measure is not going to solve the housing problem in all of Spain, but "where it represents 7% or 5% of purchases." It refers to cities such as Marbella (7.1%) or Barcelona (5.3%) and some municipalities in the Balearic Islands, where they reach 10%.
However, several law firms that process
golden visas
for Asian investors agree that the applications have lost intensity due to the tight control of money laundering. “For just over a year we have noticed a veto for
compliance
control and the concessions have been in dribs and drabs, especially to citizens of China, Turkey, Iran and Russia,” they explain at Carbray International, which has processed more than 200 visas. golden in the last four years in Spain. “The banks do not want Chinese investment and it is more complicated for them to make certain investments. In recent months, a drop in Chinese investment in Spain has been detected, but it could also be because they have already invested a lot of money,” continues Martín.
The Government's announcement has already had the first consequences: "Clients who had the permit request process underway have asked us to cancel it because they no longer have legal security," says Aquino. “We are detecting a flight and fear effect in all our clients and investors, to the point that many have asked us if this will in some way affect the residence permits for investment already granted in the past,” concludes Martín.
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