Proposed Ending of the Spanish Golden Visa Scheme

On April 15th, Spanish Prime Minister Pedro Sánchez announced the winding down of the Spanish Golden Visa scheme, sparking a wave of discussions and concerns about its impact on potential expatriates and property investors, especially Britons, interested in relocating to Spain. This decision, framed by the government as a move to quell property speculation and make housing more accessible to locals, has led to speculation about the broader implications for foreign nationals wishing to move to Spain.

Introduced in 2013, the Golden Visa scheme allowed non-EU nationals to obtain Spanish residency by purchasing property worth at least €500,000. It was aimed at boosting the Spanish economy by attracting foreign investment. However, with about 70% of these visas issued in major cities like Madrid, Malaga, and Barcelona, the government has linked this scheme to rising property prices and affordability issues for local residents.

Despite the dramatic headlines, the end of the Golden Visa scheme may not severely impact most Britons desiring to move to Spain. The historical data reveals that since 2013, only 165 British nationals have obtained residency through this route—a fraction of the 10,000 Britons who annually purchase Spanish property. Furthermore, the real estate transactions related to Golden Visas constitute only 0.25% of all property deals in Spain since 2016. This indicates that the Golden Visa scheme has been less significant for the overall expatriate community than suggested by its public profile.

For those still interested, alternatives to the Golden Visa exist and are widely used. The Non-Lucrative Visa (NLV) is popular among retirees and those not seeking employment in Spain, requiring proof of sufficient financial means without engaging in economic activity. Meanwhile, the newer Digital Nomad Visa caters to remote workers, offering tax incentives under the Special Expats’ Tax Regime (SETR), known as the Beckham Law, which offers a flat 24% tax rate on income up to €600,000.

The proposed phasing out of the Golden Visa might prompt a short-term rush to purchase property under the existing rules, but its long-term impact on British expatriates seems limited given the popularity of other visa types and the relatively small number of Golden Visas issued to Britons. Moreover, the practicality of these visas suggests that the majority of British property buyers in Spain, often purchasing homes below the €500,000 threshold, will likely remain unaffected directly by the change.

Spanish authorities have also expressed a commitment to ensuring that the termination of the Golden Visa does not retroactively affect those who have already obtained it. Many holders have the potential to convert their temporary residency into permanent residency after five years, adhering to existing regulations.

As the Golden Visa becomes a subject of heated debate, the Spanish government faces broader challenges, including accusations of the scheme fostering corruption, money laundering, and other illegal activities—a narrative supported by EU officials urging member states to terminate such programs. The criticisms align with concerns about the ethical and security implications of “investment-for-residency” schemes broadly.

Given these dynamics, prospective movers should seek comprehensive advice on taxation, especially in light of recent wealth tax threshold adjustments in regions like the Balearic Islands, Madrid, and Andalusia. They should also consult relocation experts about the financial prerequisites for alternative visas, which require proof of sufficient income and healthcare arrangements.

While the termination of the Spanish Golden Visa might initially seem like a significant obstacle for prospective British expatriates, a closer examination and understanding of the available alternatives suggest that the impact may be less dire than perceived. Those considering relocation should focus on preparing for the existing and more widely applicable visa requirements, ensuring compliance with the evolving Spanish legal and economic landscape…Read More