Spain Latest Country to Pull its Golden Visa Program

May 2, 2024 — Unintended consequences – they come with the best of ideas. Spain’s Golden Visa program, where foreigners could get extended resident visas for purchasing real estate worth at least 500,000 Euros, is now ending. Over 14,000 people from non-European countries had taken advantage of the program. Spain joins Portugal in shutting down the real estate portion of its Golden Visa programs (Portugal modified its last fall). Greece is modifying what it offers, increasing the investment to 800,000 Euros from 500,000 in Athens and on popular islands like Mykonos.

The unintended consequences are similar to what is happening to real estate all over the world. Many buyers from China and Russia and other countries took advantage to launder some of their money, evade taxes, invest a hot real estate market, and gain long term residency in an attractive country. The result was to drive up property prices in the most desirable cities and areas, making them unaffordable for residents of the host countries. Affordable housing became harder to get, and governments realized that the advantage of attracting capital was not worth the harm to its own citizens. The residency programs were unpopular among the Portuguese population.

What made the situation worse was how some of the investors used the properties they purchased. Many turned their apartments or homes into short term rentals like VRBO or Airbnb, which effectively removed them as rental options for local residents, driving up rents. Others sold them to other non-residents, adding to the problem. As rents increased and the supply of housing grew smaller, many citizens had to move out of cities and take on longer commutes or new jobs. An analysis by AZA Institute of Labor Economics found that Golden Visa programs increased the price of high end real estate by about 10%. Perhaps the minimum purchase should have been higher, or limited to regions in need of development.

There still are some countries offering Golden Visas
There are still some countries where you can invest in real estate, a business, or make other financial investment in order to obtain a residency permit. But the number is shrinking. Malta, Greece, Cyprus, and Italy are among the most attractive because of their ambiance and stability. Others include Australia, Austria, Canada, Luxembourg, Malaysia, Monaco, Namibia, New Zealand, Panama, Singapore, and Thailand. Some of these offer residency for real estate, while others require financial investments at different levels.

Comments? Would you consider taking advantage of a Golden Visa program to gain a long term residency in another country? Share your thoughts in the Comments section below.