Spain will end so-called its so-called "golden visa" scheme, which entitles internationals who invest at least €500,000 in real estate in the country to a residence permit, Prime Minister Pedro Sánchez announced on Monday.
By abolishing this, Spain hopes to curb speculation in the property market. With a lot of wealthy non-Spaniards buying property in Spain, the authorities reason that it has become more difficult for young people to acquire property.
The 'golden visas' were introduced in 2013 by the Spanish Government under then-Prime Minister Mariano Rajoy, who hoped to attract more foreign investors, as Spain was struggling economically after the financial crisis.
These visas did not only apply to real estate investments but also to investments in companies, for example. Still, 94% of them involved real estate. Additionally, the phenomenon is limited to certain regions such as Barcelona, Madrid, Malaga, Alicante, Valencia and the Balearic Islands, "where the real estate market is already very tense," Sánchez said.
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Portugal had a similar favourable tax regime that also was abolished last year, while Greece has tightened rules on granting residence permits as well.
The European Commission was previously critical of the 'golden passports', fearing that rich Russians and Chinese nationals in particular would abuse them.
The abolition in Spain would be approved at the council of ministers as early as Tuesday, Belga News Agency reports.
