Spain Reconsiders the Golden Visa Program and Real Estate Impact
The government is examining the possibility of ending the golden visa program that grants residence rights to foreigners investing in real estate, a shift reported by Reuters. The proposal has drawn criticism from left leaning parties and prompted concerns about its effect on housing prices. In many coastal areas and major cities, investors have been a notable force in the market, while real estate firms emphasize that the bulk of investments go toward higher priced homes or secondary residences.
Íñigo Errejón, leader of Más País, stated this week that an agreement with the Ministry of Social Security to conclude the program is under discussion. Under the current framework, a residence permit can be obtained by purchasing a property valued at five hundred thousand euros or more. There is also the potential to pursue Spanish citizenship through this route. Additionally, investments of more than two million euros in Spanish public debt or more than one million euros in shares of Spanish companies or deposits in national banks can qualify an investor for the program.
The government has not formally confirmed plans to end the program. An official familiar with the talks told Reuters that the deal was not yet official, and proposals from the parties remain under review.
European authorities are urging EU member states to end programs that allow residency or citizenship through investment and to tighten scrutiny when issuing permits. They view such schemes as potential security risks and avenues for money laundering.
Official figures indicate that Spain has granted around five thousand residence permits under this program, with Chinese investors leading the list.
The potential abolition of the golden visa could affect parts of the real estate market that depend on foreign demand, particularly along the Mediterranean coast and in central hubs like Barcelona and Madrid. The Balearic Islands have been among the regions pressing hardest for action given the weight of foreign buyers in their property market. A prior attempt to bar sales to non residents faced legal obstacles, but regulators did impose stricter controls on real estate brokerages. In 2022 the Balearic Islands recorded six thousand one hundred thirty three foreign purchases, the highest number in a decade of data collection. Those purchases accounted for about thirty four percent of total sales in the islands, the second highest share since a similar level around two thousand fifteen.
José María Basáñez, president of Tecnitasa and head of Atasa, notes that the share of foreign buyers in Spain has hovered around ten to fifteen percent in recent years, ending twenty twenty two near twelve percent. Yet this average masks regional variations. In some areas foreign demand dominates: in the Canary Islands about twenty seven percent, in the Region of Murcia around twenty one percent, in Catalonia roughly sixteen percent, and in Andalusia near fifteen percent. Provinces with the strongest foreign ownership influence include Alicante over forty two percent, the Balearic Islands over thirty six percent, Málaga over thirty four percent, Santa Cruz de Tenerife around thirty two percent, Girona around thirty one percent, Las Palmas just over twenty two percent, and Murcia near twenty one percent. These counts suggest that certain districts may be heavily influenced by foreign ownership more than others.
Despite the concentration in major city centers and coastal areas, foreign interest also appears in smaller locales. Real estate portals indicate that twenty two towns with populations under five thousand show higher interest from international buyers than the national average. Examples include Fuente Obejuna in Córdoba where a large share of recent portal visits come from abroad; Garcirrey and El Milano in Castile and Leon; Cala Ratjada in Majorca; Laroya in Almeria; Valle Gran Rey in La Gomera; and Alicante communities such as Cómpeta and Ciudad Quesada. Other towns in Malaga and Mallorca also report substantial foreign inquiry. In several of these areas foreign buyers and local buyers share the market closely, highlighting a nuanced pattern of demand across regions.
Analysts emphasise that the overall percentage of foreign buyers remains a minority at the national level, but regional pockets of high foreign activity can shape pricing and development trends. Market observers note that the dynamics of foreign demand can influence planning, financing, and regulatory responses in areas most affected by investment flows. The evolving policy landscape continues to attract attention from investors, policymakers, and housing advocates who weigh the potential benefits of investment against the goals of housing affordability and market stability.
Attribution: Reuters report and related market analysis. Additional data cited from regional property market studies and industry associations.