Home » Spanish government blames speculators for demise of Golden Visa

Spanish government blames speculators for demise of Golden Visa

spanish real estate market

The Spanish government say speculation, gentrification and “excessive demand” justify terminating the Residency by Investment scheme for property investors, popularly known as the Spanish Golden Visa.

The plug is finally being pulled on the real estate part of Spain’s Residency by Investment, or so-called Golden Visa scheme, whose days have been numbered ever since the Socialists and hard left took power in 2018, especially after Portugal and Ireland announced the end of their property investment schemes last year. On Monday 8th of April PM Sánchez announced government plans to scrap the real estate component of the scheme, introduced by the Popular Party government of Mariano Rajoy in 2013, which he blames for encouraging speculation and driving up house prices in hot markets. According to Spanish press reports existing visas will all have expired within the next eight years, though I haven’t seen any official guidance from the government as to what will happen to Golden Visas that have already been issued. I predicted that the Golden Visa property scheme would be gone by the end of 2023, so I was a few months out.

Dismal start

The Golden Visa was introduced in 2013 in the wake of Spain’s real estate and financial crash to attract foreign capital and help mop up the property glut. Results were dismal at first because the costs and benefits of the visa did not compare well to other countries like Portugal, and the application process was a bureaucratic nightmare. In 2014 I reported how the Spanish Golden Visa scheme attracted just 72 real estate investors in the first seven months, and how even Malta’s Golden Visa was more popular than Spain’s. Two years after launch the Golden Visa scheme was tweaked for better results, but it wasn’t until 2016, three years after introduction, that the Spanish Residency by Investment scheme started picking up steam. Between 2016 and 2020 it never attracted more than 1,000 property investors in any year, and it wasn’t until 2022 that numbers really started to pick up, almost a decade after it was launched. The scheme failed to do what it was introduced to do, and is now being eliminated for being too successful.

You could argue that the Spanish Golden Visa was never fit for purpose, has never been justified by its mediocre results, has outgrown its usefulness, annoys the EU, and governments shouldn’t be in the business of selling residency or citizenship anyway, though many of them are at it. But the reasons Sánchez and Rodriguez have given for scrapping the scheme are entirely different.

How the Spanish government justifies ending the Golden Visa for property investors

The government argues that the Golden Visa has encouraged “speculation”, driven up house prices in hot markets, crowded / priced out local buyers, and gentrified areas, so by getting rid of it the government will make housing more accessible and affordable. “We are going to take the measures necessary to guarantee that housing is a right and not just a speculative business,” said Sánchez when he announced the move on Monday.

“These types of investments stress the market, and drive up house prices, so by eliminating them we are going to cushion and halt this kind of speculation,” said Housing Minister Isabel Rodríguez. “The speculation has increased exponentially in the last couple of years,” she goes on. “In 2022 2,017 visas were granted, rising to 3,217 in 2023, and in the first two months of this year another 424 have already been granted. Which is to say that alarm bells went off, as in the last two years the number of Golden Visas for foreign investment have doubled.”

According to a press release published at La Moncloa – the office of the Spanish President – Rodríguez told the Cabinet that Golden Visa investments “put the market under great pressure, drive up the price of houses, and encourage speculation.”

Spanish housing minister Isabel Rodríguez
Spanish Housing Minister Isabel Rodríguez. Credit: Moncloa/Borja Puig de la Bellacasa

The Housing Ministry has produced a report analysing Golden Visa demand and its impact on Spanish housing markets. This report was presented to the Spanish Cabinet on Tuesday and its recommendations approved, meaning that real estate investments will now be removed from the Spanish Residency by Investment scheme. Beyond that few details have been provided. Does this mean a sunset for existing visas? Some media reports suggest as much.

So if government is justifying its decision by arguing that Golden Visas encourage speculation, excessive demand driving up house prices, crowding out / pricing out locals, and gentrification, how do these arguments stack up?


One of the main reasons repeated over and over by the government for eliminating property investment from the Golden Visa is to stop “speculation”. They imply that Golden Visa investors are all just looking for a fast if risky return (dictionary definition of speculation: Engagement in risky business transactions on the chance of quick or considerable profit.) whilst in reality Golden Visa investors are the opposite of speculators. They are long-term investors who see real estate as a safe place to put their money in return for a long-term visa, as well as a home to use when in Spain. If you call Golden Visa investors speculators, then you either don’t understand the concept of speculation, or you are using the term as a smear.

Spain had a highly-speculative housing bubble that brought the country to its knees when it burst in 2008, and the trauma of that speculative boom, with all its spivs and chancers who made (and lost) fortunes, is still fresh in the collective memory. There is little or no property speculation today in Spain because returns are way too low, whilst the costs and risks are way too high. But if you want to get a knee jerk reaction from the Spanish population against a group you don’t like, just imply they are real estate speculators and job done.

Excessive demand driving up house prices and crowding / pricing out locals

The Housing Ministry report uses the examples of Barcelona and Marbella to argue that Golden Visa investors have created “excessive pressure on housing demand and therefore prices” in those areas, whilst also fueling gentrification. It claims that in 2023 5.3% of buyers in Barcelona and 7.1% of buyers in Marbella were Golden Visa investors. 

spanish golden visa impact on barcelona and marbella market
Graphs from the Housing Ministry reports showing Golden Visa demand impact on Barcelona and Marbella sales

There were 14,899 homes sales in Barcelona city in 2023 (source: Gencat/registrars), so 5.3% would mean 790 Golden Visa investors. We also know there were 3,456 sales involving a foreign buyer (23% of the market), which implies that 23% of foreign buyers also applied for a Golden Visa. Some of them would have bought primarily to get the visa, but it’s fair to assume that some were buying anyway, and applied for the visa as an additional benefit they were entitled to, for example in the case of US and UK buyers. I suspect that if we had a breakdown of the nationality of foreign buyers in Barcelona in 2023, the figures would suggest that Golden Visas were the driving motivation for a significantly smaller number of buyers that 5.3%. I expect that eliminating the Golden Visa for foreign property buyers from outside the EU will have a negligible impact of foreign demand in Barcelona. If I’m right, then the government is barking up the wrong tree. And anyway, I think that foreign demand will cool down regardless of the Golden Visa.

But even if you do accept that Golden Visas were the primary motivation for 5.3% of home purchases in Barcelona in 2023, does it follow that they are exerting “excessive pressure on housing demand and therefore prices”, as the Housing Ministry report asserts? Barcelona home sales fell by 7% in 2023 whilst Barcelona house prices rose by just 0.1%. So whilst demand was shrinking and house prices going nowhere the Ministry claims Golden Visa investors were pumping up demand and prices. It doesn’t stack up. 


The government argues that Golden Visa investors are behind a process of gentrification in some areas of hot markets like Barcelona. What is gentrification? The dictionary definition of gentrification is the ‘restoration and upgrading of deteriorated urban property by middle-class or affluent people, often resulting in displacement of lower-income people’. But Barcelona is also home to a great example of what happens when you block gentrification, and discourage investment, as you can see in the now squalid Raval district. The alternative to gentrification can be urban decay. But whatever the arguments for and against gentrification, the claim that a small number of Golden Visa investors have driven the gentrification of Barcelona city districts is highly speculative. The government is accusing Golden Visa investors of driving gentrification because they know it’s a dirty word in Spain. Another type of smear.

Non sequitur

The Housing Ministry report wraps up by saying that “one could conclude that at a local level the scheme might be exerting abnormal pressure on demand in some areas and, therefore, on prices, and with on occasions the consequent gentrification of those areas.” It ends with an extraordinary non sequitur. It calls for a modification of the Golden Visa law to “allow for the removal of the benefits currently envisaged in the residential sector and to redirect that investment in a more qualitative manner, especially linked to the promotion of affordable housing and the rehabilitation of homes for affordable or social housing purposes.”

In other words, get rid of the Golden Visa investors and direct their funds towards affordable housing. How does that follow? There is no suggestion that the government is going to tweak the scheme to offer Golden Visas in return for an investment in affordable housing. They have said they are going to eliminate housing investment from the Golden Visa scheme altogether. Yet the Housing Ministry seems to assume that money from Golden Visa investors can now be channelled into affordable housing having just called them speculators and told them to get lost. There will be no “investment to redirect”.

This non sequitur is repeated at La Moncloa’s website. What investment are they talking about? Where will the funds come from? From Golden Visa investors? It makes no sense.

Will eliminating the Golden Visa help address Spain’s housing crisis?

Housing Minister Rodríguez argues that eliminating the Golden Visa is an important first step towards solving the Spanish housing crisis. As the Housing Ministry website explains in a press release, under the heading ‘Prioritise housing as a right and not as speculation’.

“This measure provides a response so that in those cities where people are looking for housing they can feel relieved because their government is offering a solution by ceasing to differentiate between first-class citizens and second-class citizens. That is to say, we prioritise housing as a right and not as speculation, since today, 94 out of every 100 visas of this type are linked to real estate investment and, precisely, it occurs in cities where the housing market is highly stressed, as the minister has highlighted.”

Will any of this increase the supply of decent affordable housing, or give locals more spending power? The small number of Golden Visa investors are concentrated in limited segments / areas at the high-end of the market (average investment in 2023 €769,000 in cash), where they mainly compete with local elites for luxury housing. Golden Visa demand is almost irrelevant to Spain’s housing affordability crisis, even in hot markets like Barcelona.

But apparently locals will now feel relieved to know that they are no longer second-class citizens just because the Golden Visa has been scrapped. The idea that Golden Visa investors are treated as first-class citizens whilst locals are discriminated against is bizarre. The only advantage Golden Visa investors get is over other non-EU foreign buyers who don’t spend at least €500,00 of their own funds. It’s another disingenuous argument deployed by the government to fabricate a problem and justify the narrative.

What about foreign demand?

Will the end of the Spanish Golden Visa property option hit foreign demand for property in Spain? To some extent, but not as much as some articles I have read in the international media suggest. Will the Chinese, Russians, Ukrainians,  Iranians, Venezuelans and Mexicans stop buying property in Spain just because they can no longer get a Golden Visa with it? Some will go elsewhere, but others will still want to get their money out of those countries and into prime real estate in a country like Spain. What about the British and Americans? I expect to see no impact on British buyers, for whom the visa is just a nice extra, and a modest impact on US demand, for whom the visa is just one consideration amongst others. But I also expect to see a general decline in foreign demand this year and next, as the post-pandemic boom deflates, so falling sales will have nothing to do with the Golden Visa.

Fishy arguments

I’m not arguing in favour of keeping the property Golden Visa. It didn’t attract enough investors when it was supposed to, and now Spain doesn’t need it to attract them. The government is right to shut it down.

But why use fishy arguments when a simple “no longer necessary” would do? It looks like government is linking the Golden Visa decision to a broader narrative popular on the left that casts investors, landlords and developers as ‘greedy speculators’ to blame for all Spain’s housing woes, whilst the government makes soon-forgotten claims about how much affordable housing it will provide, and pursues rent-control and squatter-protection policies that only make the housing situation worse. Someone must take the blame, and speculators make a good scapegoat for the government.