This is a website for buyers, owners, and sellers of property in Spain, offering reliable information and resources to help you get things done with confidence. It is run by Mark Stücklin, author of the Spanish Property Doctor Column in The Sunday Times (2005-2008), and the book ‘Need to Know: Buying Property in Spain’ published by Collins.
Mark Stücklin
The Spanish residency investor scheme, known informally as the “Golden Visa”, has encouraged €742 million worth of investment from Non-EU citizens purchasing Spanish property in order to get a type of residents visa, reports the Spanish press. Is that a good or bad result?
The so-called Golden Visa scheme, which offers a limited form of residency and a long-term path to Spanish citizenship in return for certain types of investment, including an investment of €500,000 in real estate, was introduced by the current Government in 2013 to attract foreign capital to Spain and stimulate demand for property after the crash. Learn more about the Spanish Golden Visa Residency Investor scheme.
DISMAL RESULTS TO BEGIN WITH
In the first 15 months of its existence, the Spanish Golden Visa scheme, which was introduced as part of a law to promote entrepreneurial activity in Spain, attracted just 530 investors, of which 490 were property investors, mainly Russian, Chinese and Arabs, according to one press report. Another report, in the Spanish financial daily Cinco Días, said that 3,266 residency permits were granted in the first year (to investors and their families), having encouraged €497 millions of investment.
The results were dismal compared to similar schemes in countries like Portugal and Hungary. Over the same period Portugal attracted around 2,200 foreign investors from outside the EU since the scheme was introduced in 2012, and Hungary attracted several thousand Chinese investors in a couple of months last year, according to trade sources.
The results were so bad that even the Spanish Government took notice and made some “technical improvements” to an overly-complex and bureaucratic scheme that put off many potential investors, as reported here in the article Spanish ‘Golden Visa’ scheme tweaked for better results.
Now Cinco Días reports here that, between launch and August of this year, the Government has issued 11,411 Golden Visa residency permits, having attracted a total of €2,173 milion of fresh capital to Spain. Of the 11,411 visas granted to date, 5,856 were for investors, and 5,555 for family members, report Cinco Días. €742 million was invested in real estate.
What is clear is that the changes to make visa applications easier for family members have had a positive impact, up from 1,312 in September 2014 to 5,555 a year later.
However, it’s hard to say that the Golden Visa is now humming along nicely, at least from a property sales perspective. The Cinco Días article does not clarify how many properties have been purchased by Golden Investor visas to date, and does not benchmark results against schemes in other countries.
If you take the figures at face value, then €742 million has been invested in Spanish real estate with a minimum investment of €500,000 per application. Assume just one property per investor, spending the minimum amount of €500,000, which equates to a total of 1,480 properties sold to Golden Visa investors since the scheme was launched, significantly less than sold in Portugal.
OKY says:
I am sorry but still the Portugal’s golden visa scheme is more attractive than Spain. Citizenship route is very hard in Spain but reasonable in Portugal. General perspective of investors are high educated people who have a good life in their country. But they want to reach the second passport for any unwanted changes in their country or their life. So citizenship possibility is very important. Any change in golden visa investors’ citizenship procedure will boost real estate sales in Spain. Every other details are more attractive in Spain than Portugal but citizenship is not.
Neil says:
Let’s face it if you want to over complicate any issue in life let’s ask the Spanish authorities to draw it up, they are the worlds experts !
Patrick says:
Portugal good results are most likely linked to the favorable tax treatment afforded (during 10 years) to retirees, and the absence of Wealth, Inheritance and Donation taxes (… not to mention Form 720).
Alan says:
We settled on our house in Mallorca in July and I plan on applying for a Golden Visa. We communicated with a law firm in Barcelona who quoted 8,000 Euro to do the work!!
Interested in speaking to anyone who has gone through this process. We are in Australia. Can we deal with the Spanish Consulate? Where do we start?
Mark Stücklin says:
Hi Alan,
€8,000 sounds steep to me.
Send me an email (ms@spanishpropertyinsight.com) and I’ll send you a guide and FAQ for Golden Visas, and put you in touch with a firm of solicitors who specialise in the service, at a much more competitive price.
Mark
Fan says:
Hi I have done by myself on the visas last year via the purchase of property in Madrid. Happy to share with you some experience. At the same time I am looking to investing in Mallorca as well and good to have some advice on your purchase there. Cheers Fan
dilip says:
Interesting article, but I think you have got the decimal point wrong when you extrapolate numbers of properties sold. Should be 1,480 and 2,970 respectively which is considerably better than your figures. (I think!)
Also how is 742 millon (proportion of golden visa investment in property) close to 50% of 2,173 million (total investment for golden visas)? More like a third. Or do I misunderstand?
Overall it does look like the changes made are making a difference, if only the Spanish government could start making life easier with less red tape in all aspects of business.
Mark Stücklin says:
Dilip, you are right about the decimal point. Thanks for bringing it to my attention. I rushed that article and didn’t check my numbers. On the other point, the Expansión article says that 50.3% of visas have gone to “investors and entrepreneurs, in concrete those who opted to buy a home,” which I took to mean more or less 50% by volume, even though that translates into 34% by value, or more like a third by value, as you say. Anyway, it’s confusing, so I’ve edited the original to make it clearer (hopefully).
dilip says:
Thanks for the response. Yes I read the Cinco Dias article, and it is confusing! I have noticed a certain cavaliar attitude in the Spanish press to statistics and figures which often don’t add up!
Mark Stücklin says:
Yes, I have noticed the same. It’s frustrating when I relly on the local press as a source of information.
La Vida Golden Visas says:
The figures are higher than we would expect and we suspect inflated by a lot of buyers prior to the launch of the programme who already bought but can still qualify. Many of our enquiries are about this but we find for new investors, the vast majority favour Portugal on an identical budget or Cyprus for an immediate passport if they have the capital (€2.5m). The reason is that Spain requires 10 years of residency to apply for citizenship, Portugal requires 6 years but without the need to reside. That is the crucial point for many investors as these programmes are not about immigration but about the right to reside, the security, travel benefits etc. Most are not ready to move families and tax status. The Spanish government has some way to go to make its programme competitive but the numbers are strong and the scheme has far more potential than it is currently delivering.