The Covid-19 global health crisis has led to a fall in global immigration, and most of Spain’s non-residents have returned to their countries of origin. So far, we have seen the extent to which this pandemic is affecting people’s movements and behavior. Going forward, an international community response will be required to assess the extent to which people will be affected when it comes to travel and residency rules, which will inevitably change due to countries’ national health concerns and consequent economic crises.
We must begin asking ourselves: how will we mitigate these concerns once the international lockdown is lifted in all countries? The international economic crisis is a reality and countries will be competing with one other to attract as much foreign investment as possible in order to alleviate the economic stresses felt from the crisis.
With regards to real estate investment in Spain, property market prices are inevitably falling. A recent article on Spanish Property Insight illustrates that most sellers (41%) will wait for a better time to remove their properties off the market, while 50% will not change their plans, and 11% of sellers are expected to drop their prices. It also predicts that the property market price in Spain will fall by at least 10% as a result of the health crisis. This will generate interest for private investors, who will see bargain opportunities for investing in Spain when travel restrictions are lifted and the situation gets back to normal, but national governments will have to offer legal certainty and health security for the public’s peace of mind. Now is the time to invest.
Rather than delving into the extent to which countries will compete with one other to relieve their economic situation, I am referring to attracting foreign investors from a tax and legal perspective. In particular, it is worth looking at the more flexible laws, such as foreign entrepreneurship. At the time that the Entrepreneurship Law 14/2013 of 27th September was approved in Spain, roughly 500 to 600 visas were granted per year for investment in real estate for properties valued over €500,000. The neighbouring country, Portugal, also adjusted their foreign investor laws in 2012 relating to real estate investments, reducing these to investments of over €350,000. Countries will continue competing despite the current crisis and the Golden Visa will be an essential instrument to attract private investors.
Can we expect changes in taxes and entrepreneurial national laws? The response to this is obvious: see the current type of Golden Visa checklist in Spain and its advantages, and more information on our website here.
You can gather a brief overview as to some of the requirements for Real Estate Investments here:
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