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ARCHIVED - Could Spain follow Ireland and scrap its Golden Visa scheme?
The Republic of Ireland is stopping wealthy foreigners from buying residency, and some Spaniards want to do the same
As of today, Wednesday February 15, Ireland is no longer accepting applications to its ‘Golden Visa’ scheme, which hands out Irish residency to non-EU citizens in return for substantial financial investment, and now politicians in Spain are suggesting that it be scrapped here too.
The political party Más País has registered a bill in the Spanish Congress to eliminate or drastically change the Golden Visa programme, which provides residency status for foreigners who purchase property worth at least 500,000 euros in Spain.
The spokesman for Más País, Íñigo Errejón, said that these Golden Visas encourage “speculation” in housing prices in Spain, arguing that, in contrast to their stated aim of bringing more financial wealth into the country, they are actually not beneficial for the national economy.
What is the Golden Visa?
The Golden Visa scheme in Spain was introduced in 2013, and in the first 5 years gave residency status to 100,000 foreigners who invested in the Spanish economy or housing market.
And it continues to be popular, with more and more foreign investment coming into Spain to take advantage of the Golden Visa scheme. The number of retirement-age Brits applying for a Golden Visa rose after Brexit as a way for them to be able to stay in the EU, but increasingly it is younger people from China, the United Arab Emirates, Qatar, Oman and Saudi Arabia who are investing in the programme.
Much of the real estate investment is centred around Barcelona, Madrid, Malaga and Valencia, although the Balearic Islands, the Canary Islands, Andalusia and the eastern Mediterranean coastline are all popular areas.
Why do they want to get rid of it?
Más País claims that the ‘speculation’ on the housing market due to the Golden Visas “is pushing up prices and driving residents out of their neighbourhoods”, even though property prices in Spain are set to dip on the whole over the next few years.
They also pointed out that Golden Visas have been questioned by the European Union, as they are carried out without checking the origin of the capital. The legislative reform they are proposing aims to ensure that these foreign investments are made in a way that really benefits the country’s economy, and does so with clean money.
Ireland’s Minister for Justice, Simon Harris, has decided to get rid of the Golden Visa programme in his own country, which was established in 2012 and offers Irish residence in return for creating jobs, because it was originally established during a time of “unprecedented economic difficulty” to help “stimulate investment in Ireland”.
Now the necessity to bring that level of investment into Ireland is not there, they have taken the advice of reports by international bodies and both internal and external reviews to scrap the programme.
In Spain, Más País is proposing new wording to the Golden Visa bill in which “significant capital investment” will be understood as that which is made for a value equal to or greater than two million euros in public debt securities, for a value of one million euros in shares or participations in public companies or bank deposits in financial institutions in the country.
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