Spain Says Adiós To Golden Visa: How it Impacts Expats

Spain has been a cherished destination for expats worldwide, attracted by its good weather, affordable cost of living and renowned cuisine. It is normal to see expats from other European countries, as well as Canadians and Americans, bask in Spain’s sun while eating tapas and drinking beer. 

Snowbirds, retirees, and expats searching for a more relaxed lifestyle have seen Spain as an excellent destination for years. However, this might change soon, as the socialist prime minister, Pedro Sánchez, has announced his plans to ban the golden visa program. This program, a special residency permit approved to boost the country’s economy after the financial crisis, has attracted foreign investors to Spain. 

In today’s article, we will explore the implications of this policy for expats and other interesting golden visa alternatives in different countries.  

Spanish passport

THE EU’S EFFORTS TO CRUSH GOLDEN VISA AND CBI PROGRAMS

If you are up-to-date with my posts and newsletter, you may be familiar with the recent changes to citizenship-by-investment programs in countries such as St. Kitts and Nevis. Plus, other Caribbean countries are imposing higher investment thresholds, making them less attractive to investors. 

All these sudden changes are not accidental, as the EU wants to suspend visa-free travel access to passport holders of countries that “sell” passports in exchange for cash. Moreover, the UK, though not part of the EU anymore, has suspended visa-free travel to Vanuatu passport holders because of concerns about its program. Walls are closing in quickly, regardless of where you want to invest. 

Portugal and Greece are other countries that have increased the investment threshold or flat-out banned their golden visa programs, further proving that global mobility is at stake. However, this article is about Spain, which intends to implement these harmful policies to its own detriment. 

Houses in Triana, Barrio of Seville Facades in Spain

THE SPANISH HOUSING MARKET IN TROUBLE

The rising costs of living, along with stringent real estate laws, have resulted in the Spanish market supplying less housing than needed. Basic economics says it best; it’s all a matter of creating more supply to meet the demand. However, the Spanish government prefers opting for failed measures like price controls and, of course, the removal of this much-needed golden visa.

Property prices have skyrocketed all over Spain, especially in major cities like Madrid, Barcelona, Málaga and Valencia, hindering homeownership for the younger generation. Moreover, even rentals are unaffordable, as salaries do not keep up. That’s why many are forced to have roommates or live with their parents till their 30s. The situation is undoubtedly problematic, but no practical solutions are being offered. None of these individuals are affected by a foreigner who wants to buy a house for over half a million euros. However, Socialist Prime Minister Pedro Sánchez sees the golden visa program as a "speculative model" that leads to "inequality" - the real problem isn't that, but poverty. Nothing new under the sun, coming from a socialist, but, as Friedrich A. Von Hayek once said, "If socialists understood economics, they wouldn't be socialists".

FOLLOWING PORTUGAL’S PATH

Just like Portugal, Spain has shot itself in the foot. According to Pedro Sánchez, this “speculative model” has made it impossible for those who pay taxes every day to find decent housing. Perhaps it would be better to lower taxes, but he will never suggest that. Spain is in a tough spot right now, with soaring public debt, budget deficits and an aging population. In this context, the country needs investment, which in turn would generate tax revenue, jobs and businesses. The removal of the golden visa is, therefore, a terrible decision that will potentially cause Spain to lose a lot of revenue and human capital. 

Apart from this flawed decision, rental price controls are being implemented, taxes never continue to increase, and it is hard to build new houses. Starting a business is also a risky venture because the public administration could be more efficient and faster, and Hacienda (the Spanish IRS, so to speak) goes after small businesses whenever they make a small profit or mistake. The government seems to be doing all it can to hinder economic growth and prosperity for its citizens, including workers and entrepreneurs.

Spanish Visa

CONSEQUENCES FOR EXPATS 

Spain is almost a dream destination for many expats looking for idyllic beaches, amazing cuisine and a carefree lifestyle. Attracted by the enticing properties they could find for €500,000 ($535,805 USD), multiple non-EU expats decided to apply for this golden visa, thus generating much-needed investment and capital for the country. In exchange, expats would be granted privileges such as visa-free travel to Schengen countries, the right to work and study, permanent residency after two years and eventual citizenship. 

Interestingly enough, between 2013, the year the golden visa was approved, and 2023, around 14,000 visas were granted. So, these individuals have little to no impact on the Spanish housing market; if at all, they have brought millions of euros into the country. Again, we’re talking about a program designed to attract wealthy people who will invest large sums of money, not average families looking for affordable housing. 

POTENTIAL ALTERNATIVES

Amidst this situation in which walls are going up and global mobility is under attack, it is vital to consider all available options. The world remains a huge place, and opportunities are available for those brave enough to grab them. At the end of the day, that’s our business; we present you with underrated yet profitable opportunities, and I personally always recommend taking action before it’s too late. 

Spain and Europe are experiencing massive trouble these days, such as skyrocketing energy prices, burdensome taxation, and even unsafety. There might be better regions to invest your money in; other countries around the world offer a better bang for your buck, a relaxed lifestyle, and safety. 

Ronda, Spain

CONCLUSION: WHERE TO GO?

So where can you go now? My recommendation is clear: Latin America. From beachfront properties in Brazil to apartments in Panama and everything in between, this region has the potential to offer you higher returns and the lifestyle you want.

All in all, when you want to invest in these types of programs, action beats inaction. Waiting for months on end or sleeping on good deals is a recipe for disaster. The more residencies and passports, the better. By having leverage in multiple jurisdictions, you will be more resilient in the event of a crisis. I cannot stress this enough: act before it’s too late. Always.