Spanish developers offer to reduce the amount of investment in real estate for residence permit Spain by 2 times 一 from € 500 thousand to € 250 thousand. If the proposal is accepted, the program “Golden visa” Spain will be more attractive to investors.
With current requirements, the Spanish residence permit program 一 is one of the most expensive. This reduces its competitiveness. Closed borders have become an additional negative factor. Therefore, reducing the minimum investment threshold 一 is an important measure.
Prospects for reducing the amount of investment in real estate
In the first 5 months of 2020, the demand for residence permit registration in Spain for investment through the purchase of real estate has decreased. Indicators were 2 times lower compared with the same period in 2019.
Developers are concerned about the decline in foreign investment in real estate. Daniel Cuervo, General Secretary of the Spanish Association of Developers and Builders (APCE), urged the government to reduce the minimum amount of investment in real estate. He proposed to reduce the minimum threshold by 2 times, from €500 thousand to €250 thousand to increase demand for visas and support the industry.
Reduce the amount of investment offered for 2-3 years to fully restore the performance of the Spanish residence permit program for investment. If the government of the country will pay attention to developers, investors will be able to get “gold visas” of this country at a lower cost.
The decrease in the number of "gold visas" issued in 2020
According to the Ministry of Foreign Affairs of Spain, the number of applications for “gold visas” through the purchase of real estate has decreased. In January-May 2020 filed more than 2 times less applications than in the first 5 months of 2019.
The pandemic has particularly affected the demand from investors from Russia and China, traditional leaders in issuing Spanish “gold visas”.
Residence permit applications for Spain for the purchase of real estate
|Country||Number of applications in January-May 2019||Number of applications in January-May 2020|
The program was affected by the coronavirus pandemic and closed borders: investors could not fly into the country to select a facility for purchase. In addition, Spain has become one of the most affected European countries by the coronavirus – this has also affected the demand for “gold visas”.
Another reason for reduced interest is the cost of obtaining a visa. The minimum amount of investment for a residence permit in Spain is now € 500 thousand. It is difficult to compete with similar offers in Portugal and Greece, where the cost of a “golden visa” is lower.
Experts predict that the programme will recover by 2021 unless there is a second wave of the pandemic. And if the cost of participation decreases, it will spur investors’ interest.
Against the backdrop of the pandemic, citizenship and residence permit programmes for investment are becoming more profitable for investors. Previously, we said that Italy has reduced the amount of investment in bonds for registration of residence permits by 2 times, and Malta has reduced stamp duty when buying property.
Portugal’s program has returned to its previous positions: May 2020 was a record-breaker in the number of issued residence permit cards for investment. The increase compensated for the decline in interest in January-April 2020.