Spain: the end of the property Golden Visa confirmed

Spain granted a residence authorisation to foreign nationals making an investment above a threshold, the most commonly used route being property acquisition.

This route has been abolished, against a backdrop of marked housing pressure in the major cities and coastal areas, where foreign demand was blamed.

We do not publish the threshold applicable before abolition, the date of entry into force, or what happens to permits already issued and their renewals: we have not been able to verify them in an up-to-date official Spanish source.

The decision is part of a European trend. Portugal removed real estate from its own scheme, Ireland closed its programme, and the European Commission keeps up constant pressure on these regimes.

Greece took a different path, sharply raising its thresholds rather than abolishing the scheme: €800,000¹ in Attica and on the most populated islands, against from €400,000² elsewhere.

For a French national, abolition changes nothing: freedom of movement allows them to reside in Spain without any investment requirement, with a simple registration beyond three months.

The scheme was aimed at third-country nationals, mainly British after the United Kingdom's withdrawal from the European Union, Chinese, Russian and from the Middle East.

For them, the remaining routes are of a different nature: work visa, business creation, or the visa for remote workers, which require an activity or a project rather than capital.

The expected effect on the housing market is debated. The number of permits issued through this route was modest relative to the national market, but heavily concentrated in a few cities and a few price segments.

One indirect effect is worth flagging for buyers already committed: abolishing the scheme removes from the market a category of buyers who bought at the threshold, in specific segments and locations. The liquidity of these properties is affected, downwards.

The mechanism is the same as elsewhere: when part of the demand buys for a permit rather than for use, the disappearance of the permit removes that demand, and the price returns to what use justifies.

The Spanish regime for posted workers remains. It allows taxation under the rules applicable to non-residents, at a rate of 24%³ up to a taxable base threshold of €600,000⁴, for 6 years⁵.

It has also been extended to employees working remotely from Spain for a foreign employer, as well as to certain company directors.

This regime is therefore the opposite of the one just abolished: it targets working people rather than capital, and it is open to European Union nationals as well as others.

The general scale, on the other hand, reaches 47%⁶ at its top marginal rate, and the solidarity tax on large fortunes applies to wealth above more than €3,000,000⁷.

A beneficiary of the posted workers regime, however, is liable to it only on assets located in Spain, which considerably reduces the base for the duration of the scheme.

• The property route has been abolished; French nationals had no use for it.
• The trend is European: Portugal, Ireland, and constant pressure from the Commission.
• The posted workers regime remains and targets working people, not capital.
• The solidarity tax on large fortunes remains payable above more than €3,000,000⁷.
• Presence of more than more than 183 days⁸ establishes habitual residence in Spain.

The general lesson is that residency by investment schemes have become, in Europe, a category heading for extinction. The States that keep them are sharply raising their thresholds, and those that abolish them do not reopen them. A plan based on this route must therefore factor in a probability of closure that is no longer theoretical.