Spain ends Golden Visa program amid housing crisis; how will it impact Indian investors?

Spain has officially scrapped its popular Golden Visa program, which had allowed non-EU nationals to gain residency by investing a minimum of 500,000 Euros in real estate. The move is part of the Spanish government’s efforts to tackle a worsening housing crisis, especially in cities like Madrid and Barcelona, where rising property prices and rents have made housing unaffordable for many locals. 

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Introduced in 2013 to attract foreign capital after the 2009 financial crisis, the Golden Visa scheme proved highly successful. It granted over 15,000 visas and drew around $10 billion in investments between 2016 and 2023, particularly from investors in the US, UK, China, Russia and India. While the visa offered benefits like Schengen travel and eventual citizenship, it largely benefitted the luxury real estate market rather than boosting job creation or broader economic growth. 

The influx of foreign investors post-pandemic significantly drove up property values, up 11% in the past year alone, further squeezing local buyers out of the market. Public protests and concerns over affordability, along with EU pressure to curb such schemes due to security and money laundering risks influenced the Spanish government’s decision. The involvement of Russian and Chinese investors has also raised geopolitical concerns, especially following the war in Ukraine. 

For Indian investors, Spain was a favored destination due to its relatively low investment  threshold and flexibility regarding physical residence. With the program’s closure, property investments will no longer guarantee residency, possibly dampening demand and affecting resale prospects. 

Indian investors may now explore alternatives like Golden Visas in Greece, Hungary, Cyprus, and Malta. Other options in Spain include the Entrepreneur Visa, the Non-Lucrative Visa for retirees, and the Digital Nomad Visa for remote workers, all offering different paths to live and work in the country.