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The Spanish government has announced a legislative initiative to abolish the Golden Visa, a type of residence permit granted to foreign investors who acquire properties worth more than 500,000 euros. This measure seeks to reaffirm the concept of housing as an essential right and not as a speculative investment opportunity. The decision arises in a context where the need for access to decent housing is intensifying, and is perceived as an effort to reduce speculative pressure in the urban residential markets of the main Spanish cities.

Reaction of the real estate sector to a controversial measure

Contrary to government expectations, experts and key players in the real estate sector argue that the elimination of the Golden Visa will not have a significant impact on the market. They argue that the volume of transactions facilitated by this visa is marginal compared to the total number of home sales and purchases in Spain. In addition, it is criticized that the measure could divert attention from more pressing problems in the sector, such as the shortage of supply and the increase in demand, which are the real drivers of rising prices.

The proposed repeal of the Golden Visa has also raised concerns about the message Spain is sending to foreign capital. Some experts interpret this measure as a setback in attracting foreign investment, especially at a time when the Spanish real estate market is well positioned globally. The concern is that, although Golden Visas represent a smaller fraction of investments, their elimination could be perceived as a protectionist and unwelcoming gesture towards the international investor.

Detailed profile of the Golden Visa investor

Statistics reveal that the main beneficiaries of Golden Visas have been investors from countries such as China and Russia, who opt for high-value properties, mainly in cities such as Barcelona. These investors tend to make their acquisitions mostly with their own funds, indicating a preference for significant and secure investments. This profile suggests that the motivations for acquiring property in Spain transcend the administrative facilities offered by the Golden Visa, pointing more towards factors such as quality of life and the country's economic and social stability.

Balancing housing and investment

The Golden Visa discussion uncovers a larger debate on how to harmonize the right to housing with the promotion of investments that drive economic development. Although the government is inclined to protect access to housing, the real estate sector questions the true impact of these visas on the market, suggesting a deeper analysis of housing and investment policies in Spain.

Opinion of Bruno Rabassa, CEO of Berkshire Hathaway HomeServices Spain

After the last and resounding announcement of our President of the Government to end the residential Golden Visa, the national and international media have echoed this measure in a tremendously effective way, probably with the conviction that the suppression of this measure in force in our country for more than a decade, could cause an adjustment of the selling prices of homes in the Spanish residential market.

Nothing could be further from the truth. The Government knows perfectly well the data of the Golden Visas granted during its validity, as well as if it has been via real estate purchase or another alternative of those contemplated, such as the investment in Spanish companies or in public debt.

The truth is that although the Golden Visa plan may have been a great attraction, the reality is that very few of the foreign buyers have accessed it, either because they were already European Schengen citizens, or simply because they did not want it because they have not considered residing in Spain.

 The numbers speak for themselves, and according to Moncloa, since the measure came into force, just under 15,000 Golden Visas have been granted, representing only an anecdotal 0.15% of all real estate transactions carried out in the same period.

Does this measure solve the price increase experienced by our Spanish real estate market? NO, not at all. What it should solve it is the increase in the available supply, and the fact is that we have gone from producing 850,000 homes per year at our peak prior to 2007 to barely 80,000, when it is estimated that 250,000 new homes are being created each year. Between black and white there is a gray scale, and neither so much nor so little.


Published: 11 Apr 2024
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