Foreign buyers are rushing to secure Spanish properties in a bid to obtain the ‘Golden Visa’ before the government scraps the scheme. The Golden Visa, introduced in 2013, grants residency to non-EU citizens who invest over €500,000 in Spanish property.
But the Spanish government, led by Prime Minister Pedro Sánchez, has started the process to repeal the visa, likely to end by year’s close. Herewith, the government aims to address rising concerns about affordability and limit the influence of speculative foreign buyers driving prices up in prime locations.
The urgency has led to a sharp rise in foreign property purchases. During the first half of 2024, non-residents bought 69,412 homes in Spain—accounting for one in five of all properties sold. This marked a 1.8% increase from the previous year, reversing a slump that had seen foreign purchases drop by about 10% in recent semesters.
Record amounts paid for Spanish homes
Non-resident buyers are spending record amounts on Spanish homes. The average price for non-residents hit €2,895 per square metre, significantly higher than what local buyers are paying. Residents, more familiar with the market, paid an average of €1,734 per square metre, still above the €1,659 paid by Spanish nationals.
Swedish buyers paid the highest prices, at an average of €3,330 per square metre. Americans and Germans were also among the biggest spenders. According to sources from CaixaBank, many of these buyers belong to the wealthiest segments of their countries, allowing them to invest in properties over €500,000 to qualify for the Golden Visa.
Luxury and new development properties are particularly in demand. Swedish, American, and German buyers dominate the luxury property market, especially in popular tourist areas like Marbella, Mallorca, and the Costa Blanca, where they represent up to 90% of luxury transactions.
British and Moroccan buyers lead the pack
The British are still the largest group of foreign buyers, snapping up 5,864 properties in the first half of the year—8.4% of all foreign transactions. Moroccan buyers followed, with 7.9% of purchases, and German buyers at 6.8%.
Other nationalities are also increasing their presence in the Spanish market. Poles, Ukrainians, and Colombians have all shown double-digit growth in purchases compared to the same period in 2023. Conversely, Russians, Norwegians, and French buyers have significantly cut back on Spanish property investments.
Golden Visa days numbered
The Golden Visa, initially introduced by then Prime Minister Mariano Rajoy in 2013, has been popular among wealthy non-EU investors, with over 14,500 visas issued. However, the end is near. Earlier this month, the government took steps to repeal the visa, pushing the draft legislation through the Justice Commission. The proposal will go before Parliament and the Senate within weeks. Even if the Senate rejects it, Congress could still force it through, which means the Golden Visa is likely to be scrapped by the end of 2024.
Also read: Costa del Sol luxury housing sector expresses regret over decision to abolish Golden Visa