CITIZENSHIP BY INVESTMENT BLOG

Why Spain, Greece, and Portugal Are Making Golden Visas Harder to Obtain

Golden Visa Programs Becoming Pricier

Investors from all over the world were drawn to Southern Europe for years by the allure of various Golden Visa schemes, which offered permanent residency status in some of the most sought-after areas on the continent. Several countries were involved in this movement, including Greece, Portugal, and Spain which provided enticing incentives for wealthy people to invest in authorized assets like real estate.

But these programs' golden age has drastically changed because of recent reforms and restrictions. The impact of these initiatives is being reassessed by governments considering growing housing shortages, rising real estate prices, and potential abuse by foreign elites.

This article explores the key changes to the Golden Visa programs in Spain, Portugal, and Greece. It clarifies the rationale behind these changes as well as the ramifications for present and potential investors, offering crucial insights into how these developing regulations may impact residency-by-investment in Europe in the future.

Spain’s Golden Visa: Protecting Local Housing Affordability

In 2024, Spain's government, led by Prime Minister Pedro Sánchez, announced the termination of its Golden Visa program (1), a contentious residency program that permitted affluent non-EU citizens to acquire residency by investing at least €500,000 in real estate. The policy, which was first implemented in 2013 to draw in foreign investment during a recession, has come under fire recently for making problems with housing affordability in large cities like Madrid, Barcelona, and Valencia worse.

The move by the administration, awaiting approval by Parliament, is consistent with its larger pledge to deal with the housing problem; Sánchez has emphasized that housing ought to be a basic right rather than a means of speculating. Although the removal of the program is perceived as a move in the right direction to reduce speculative investments and guarantee more affordable homes for residents, detractors contend that there were other factors contributing to the skyrocketing real estate prices.

But it's unclear how long other investment-based residency programs, like buying government bonds or investing in businesses, starting from €1,0 million, will last. Although these options have traditionally had greater minimum investment requirements, it is uncertain how they will fit into Spain's residency laws going forward.

British nationals who had depended on the Golden Visa scheme for lengthy stays in Spain following Brexit would likewise be greatly impacted by its discontinuation. In the absence of this route, non-EU nationals' 90-day visa-free stay will place greater restrictions on the residency possibilities available to British citizens.

This ruling fits into a larger pattern in the European Union where scrutiny of investment-based residence schemes is being applied considering worries about housing accessibility, money laundering, and security.

Portugal's Golden Visa: A Strategic Overhaul

Portugal, which was a pioneer in the field when it introduced the Golden Visa program in 2012, formally discontinued its popular real estate investment options in 2023, mostly because of the sharp rise in the cost of real estate in Lisbon and Porto. Housing inequality had gotten worse because of foreign investment driving real estate prices above the locals' means. Foreign investors were able to obtain residency under the program by investing €500,000 in real estate. But to address these disparities and relieve the strain on urban housing markets, the government, led by then Prime Minister António Costa, decided to end the initiative. (2)

Although the ruling changed Portugal's approach to residence, foreign investments are still allowed, such as minimum non-refundable donation of €250,000 to support the arts or national cultural heritage. Other investment options start at €500,000 into qualifying venture capital funds, scientific research projects, or forming a local company that generates at least five permanent jobs. A 183-day annual residency requirement was also included in the new standards to guarantee that investors integrate into the community and support the local economy.

Portugal has established new avenues centered on entrepreneurship and commercial investments, particularly in innovation and job creation, while some investors are frantically searching for alternatives, particularly those seeking to obtain EU membership. The modifications are indicative of the government's wider initiatives to establish a more equitable property market and encourage sustainable development in impoverished regions.

Greece's Golden Visa: Raising the Bar

Greece's Golden Visa program, which was first implemented in 2013 and used to have a €250,000 minimum investment requirement, has been instrumental in drawing in foreign capital and stimulating the nation's real estate sector. The scheme was primarily attractive to investors from China, Russia, and the Middle East, which resulted in an increase in house prices, especially in regions with high demand like Athens, Santorini, and Mykonos. This raised questions regarding affordability for Greek citizens, particularly in areas with high tourism.

As a result, the Greek government changed the program significantly, raising the minimum amount that must be invested in real estate. The barrier, which was first doubled to €500,000 for a few select strategic areas in 2023, increase once again to €800,000 in September 2024 (3) to reflect changing market conditions and address the issue of escalating real estate prices. In addition to relieving some of the strain on the local property market, this policy seeks to reduce speculative investments and promote a more sustainable flow of foreign capital.

Stricter laws have also been implemented to restrict short-term rentals, like Airbnb, which were making the local population's housing need worse. These changes are part of a larger plan to guarantee more equitable distribution of the advantages of foreign investment and to stop the Golden Visa program from adversely impacting urban affordability.

The government may continue to refine the Golden Visa program if real estate prices continue to rise, reinforcing its commitment to balancing foreign investment with the housing needs of Greek citizens.

Malta Golden Visa: A Viable Alternative

The recent revisions to Golden Visa programs in well-known European locations such as Greece, Portugal, and Spain indicate a dramatic change in the available residency possibilities for wealthy individuals. Despite the fact that these programs have historically offered a simple means of obtaining EU residence through real estate purchases, governments have been forced to reevaluate their approach as worries about their impact on local real estate markets have grown. For instance, Spain's decision to revoke the Golden Visa is intended to alleviate the housing crisis and guarantee affordability for locals. Parallel to this, Portugal and Greece have passed policies emphasizing long-term economic expansion by granting business and innovation-based visas in addition to tightening investment requirements.

Although investors now face both opportunities and challenges because of these changes, it is crucial to look into other choices for EU residency. Because of rising prices elsewhere in the EU, Malta has become a very desirable and feasible alternative. Investors can obtain Malta residency through the Malta Permanent Residency Program (MPRP) via a real estate rental (or purchase) plus a government contribution starting as low as EUR 110,000. Additionally, individuals seeking a more comprehensive option can obtain Malta citizenship, including an EU passport, through Malta's Citizenship by Investment Program with a total investment of close to EUR 1 million.

In conclusion, Golden Visa programs are becoming costlier and harder to access as governments in countries like Spain, Greece, and Portugal move to safeguard their real estate markets. This tightening of options mirrors a wider global shift toward protectionist policies, resulting in fewer opportunities for investors. However, those who remain flexible can still find valuable opportunities in well-structured projects that align with the economic needs of regions offering residency-by-investment programs. By recognizing these changes, investors can play a role in promoting more sustainable and inclusive growth in these nations.

Sources: (1) BBC
(2) The Portugal News
(3) India Times
 
 
Because immigration by investment programs can change over time please contact us to speak with an advisor or to receive a preliminary quotation. The information provided in this blog post is intended for educational and informational purposes only. It should not be construed as legal or financial advice.

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