Spain has officially ended the Golden Visa programme with effect from Thursday (Apr 3). The Golden Visa programme allowed foreign investors to get residency permits by investing in the country. The scheme was launched in 2013.

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One of the ways to get the golden visa was to purchase property worth at least €500,000 ($555,000) in Spain. The programme also had other options such as investing $2.17 million or more in state bonds or Spanish companies. In spite of the other options, 95 per cent of all golden visas were issued through the real estate investment, as per reports.

From 2013 to 2023, Spain granted 14,576 golden visas and most beneficiaries came from China, Russia, the UK, the US, Ukraine, Iran, Venezuela and Mexico, according to government figures. 

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Why was the Golden Visa programme introduced?

The Golden Visa programme was introduced to help the country's economic welfare. Many countries including Spain, Portugal and Greece wanted to attract foreign investment after they climbed out of the debt crisis of 2009. Spain earned over €1 billion annually from its Golden Visa programme and from 2016 to 2023, the programme generated about $10 billion in investments, as per reports.

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The Golden Visa programme became popular as it granted applicants the right to reside and work in Spain but did not require them to live in the country full-time, as per reports. It also allowed visa-free travel to all Schengen Zone countries. Beneficiaries of the golden visa had to visit Spain for one day per year to maintain their residency status. Additionally, data shows that the programme generated about $10 billion in investments for the country.

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Why is Spain scrapping the golden visas?

The Spanish government decided to scrap the golden visa programme to tackle the growing housing crisis. The property values skyrocketted leaving domestic buyers out of overstressed markets.  Affordable homes became a distant dream for ordinary Spaniards, specially in Madrid and Barcelona. As per reports,  over the past year in Spain, rents and home prices have both risen by 11 per cent.

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Spanish Prime Minister Pedro Sánchez said his government's intention to scrap the scheme was intended "to guarantee that housing is a right and not merely the subject of business speculation".

However, some have criticised the move as a "political stunt" and said that it won't help the real estate sector.

(With inputs from agencies)