“Housing is a constitutional right, not a mere speculative business. That’s why we’re going to eliminate the golden visa,” Spanish Prime Minister Pedro Sanchez announced in a news conference in April 2024.
One year later, the program accepted its last applications on April 2, after granting just under 15,000 visas mostly to nationals from China, Russia, the UK, the US, Ukraine, Iran, Venezuela and Mexico.
Spain’s investor visa allowed non-EU nationals and their close relatives to obtain residency visas – and a pathway to applying for Spanish citizenship – if they invested €500,000 in Spanish real estate.
But visa holders were not obliged to live, work or study in Spain, even though they had purchased the right to do so, meaning they could just as easily use properties as personal holiday homes or to rent out to tourists.
When the golden visa scheme opened in 2013, Spain was among several EU countries that launched similar programs as a way to bolster the coffers in the wake of the 2008 financial crisis.
But 12 years later, times have changed. Spain is now in the thick of a decade-old housing crisis that saw rents across the country increase by 80 percent between 2014 and 2024, most acutely in major cities and tourist areas.
At the same time, tourism has hit record levels, fuelling frustrations with landlords purchasing buy-to-rent housing available on platforms like Airbnb.
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Golden visas
Golden visa investors may have multiple ways of buying residency, such as opening a business or a sizeable bank account, but typically, they “almost always choose real estate, because in this way the investment is not 'lost' – they own a property which can then be re-sold”, says Lior Erez, departmental lecturer in theory of politics at Oxford University.
Naturally, investors are drawn to the most desirable locations. In Spain, 90 percent of all investor visa property purchases were concentrated in six of Spain’s locations – Barcelona, Madrid, Malaga, Alicante, the Balearic Islands and Valencia – where the housing crisis is hitting the hardest.
Wealthy international investors have been blamed for contributing to rent increases that means the average tenant in Spain spends almost 40 percent of their overall income on rent, a significantly higher rate than in the rest of the EU, which is facing its own housing crisis.
Young people especially have been priced out of the market as they have the highest rates of unemployment and part time employment, but older people and poor families are also vulnerable.
Eliminating Spain’s golden visas will “give opportunities to those who have problems accessing housing in specific locations with price tension and lack of residential supply”, housing minister Isabel Rodríguez said in a statement.
But, considering that golden visa investments account for hundreds of property sales each year, the overall impact of cancelling the scheme could be limited.
“Spain’s real estate market is very segmented between affordable housing, middle income and upper-end properties,” says David Felipe Echeverry Perez, professor of finance at the University of Navarra. “It will likely reduce price pressures at the highest end of the market, but that is not where the bulk of Spain's shortage of housing lies.”
Housing crisis
One of the main drivers of Spain’s housing crisis is the country’s lack of social housing, which makes up just 2.5 percent of all housing stock, compared to 14 percent in France.
“Spain based their social housing policy on home ownership,” says Sorcha Edwards, general secretary of Housing Europe, a European federation of public, cooperative and social housing. “But now the environment has changed. People are more mobile, particularly in cities, so there is increased need for rental housing.”
Edwards says the “limited buffer” of social housing means there are not many options for people priced out of the wider rental market – which they easily can be.
Some 92 percent of rented residential property in Spain is owned by private landlords, but tenants, “historically, don’t have very strong protection”, Edwards says. And then there is the problem of landlords renting their properties out as short-term tourist lets, which drives up rents even further.
As demand for rental properties grows, supply has remained “rigid”, according to Spain’s national bank, with new builds hampered by “constraints on housing production due to construction workforce shortages, rising costs and a lack of investment in land development”.
It forecasts that the housing deficit will rise to 600,000 in 2025.
“Structural change is needed – promoting affordable, sustainable housing and overcoming local political resistance,” says Echeverry Perez.
A ‘decisive challenge’
To this end, Spain’s government in January put forward a 12-point plan to strengthen the right to housing.
As well as building more public housing, the plan proposed measures such as higher taxes on holiday rentals, tax breaks and protections for landlords who provide affordable housing, and amending laws to speed up construction processes and expand the availability of land for private construction.
“They're trying to, from what I can see, act on all of the different levers,” Edwards says. But with an entrenched housing crisis coinciding with a cost-of-living crisis “it's very difficult to do that”, she adds.
The plan also included an eye-catching proposal to impose a tax of up to 100 percent on the value of homes bought by non-EU citizens, putting a further block on wealthy overseas nationals investing in Spain.
This measure alone may not solve broader issues, but might win political points – as could abolishing golden visas. Erez says, “the public perception of these programmes is usually negative”.
Increasingly, Spanish authorities seem unafraid to take a radical approach. Barcelona in June pledged to rid the city of its 10,000 tourist rental flat licenses by 2028 in a bid to prioritise local residents.
“The West faces a decisive challenge: To not become a society divided into two classes, the rich landlords and the poor tenants,” Prime Minister Sanchez said in January.
“If we don’t act, European and Spanish society will end up divided into two kinds of people: those who get one or more houses from their parents and can spend most of their income on things like education and travel, and those who spend their lives working to pay the rent and who end up as old people who don’t own the home they live in.”
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