Spain to end ‘golden visa’ scheme over property market impacts

Spain is set to end its so-called golden visa scheme, which has allowed international individuals to buy residence permits, through a minimum €500,000 real estate investment in the country.

The announcement was made by Prime Minister Pedro Sánchez with the aim of putting an end to speculation in the Spanish property market, The Brussels Times reported.

Spanish authorities have argued that, because of this scheme, international wealthy individuals who were buying property were making it increasingly difficult for the younger generation to buy property.

In Spain, the scheme was introduced in 2013 under the Mariano Rajoy administration, hoping to attract investors to fight the country’s economic and financial crisis at the time.

Even though this scheme permitted individuals to invest in companies, 94 per cent still turned to the property market. However, the scheme only targeted five specific regions: Barcelona, Madrid, Malaga, Alicante, Valencia and the Balearic Islands, “where the real estate market is already very tense,” Prime Minister Sánchez said.

Despite its allure, this scheme is being scrapped in different countries across Europe because of possible corruption and abuse. The European Commission (EC) has appealed to member states to “act” on golden visa programmes by scrapping them.

Now, Ireland, Cyprus and the Netherlands completely stopped the scheme whilst Portugal changed its programme in October. Nonetheless, all member states made stricter rules for Russian and Belarusian nationals interested in acquiring visas because of Russia’s invasion of Ukraine.

In Australia’s case, its visa scheme – which requires applicants to invest a staggering €4.58 million – is said to have attracted many corrupt officials, which led the country to put an end to the programme.

Citizenship-by-investment programmes have come under heavy criticism around the world. Despite this, Malta has stood firm, maintaining its own programme which includes citizenship and residency by investment. The scheme was first introduced in 2013 and has undergone various tweaks throughout the years. Almost 10 years later, in 2022, the EC filed a case before the European Court of Justice over its citizenship-by-investment programme.

At the time, EU Justice Affairs Commissioner Didier Reynders said that by offering citizenship in exchange for predetermined payments or investments, without a genuine link with the Member State concerned, “Malta breaches EU law.”

He asserted that European Union values “are not for sale.”

What would you have to pay to be able to obtain a Maltese passport?

Community Malta Agency is a Government authority responsible for administering all Maltese citizenship-related issues.

This includes accepting and processing applications for the acquisition of Maltese citizenship which can be given by birth, registration, naturalisation through long term residence, for exceptional services by merit and for exceptional services by direct investment in Malta.

In addition, it is also responsible for carrying out an in-dept due diligence process on each application.

According to the agency, the requirements for an investor to apply for a Maltese citizenship are:

• Proof of residence in Malta for a period of 36 months subject to an exceptional direct investment of €600,000. The 36-month period might be cut to 12 months, but the investment would then be of €750,000.

• Purchase of an immovable residential property in Malta, having a minimum value of €700,000 or take a lease of a property that falls within the same category for a minimum annual rent of €16,000. The property shall be adequate and suitable for the applicant and his dependants, for a minimum period of five years from the date of issue of the certificate of citizenship.

• Carry out “exceptional” direct investment in Malta, in accordance with the Granting of Citizenship for Exceptional Services Regulations.

• Prior to the issue of certificate of naturalisation, a minimum of €10,000 should be donated to a registered philanthropic, cultural, sport, scientific, animal welfare or artistic non-governmental organisation or society, or as otherwise approved by the Agency.