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  • Writer's pictureCreimerman Product Team

The End of Spain's Golden Visa Program: A Controversial Turn

This initiative, which allows foreign investors to obtain residency through real estate investments of over 500,000 euros, has been a cornerstone for attracting Foreign Direct Investment (FDI) to Spain, especially in the real estate sector. With cities like Barcelona and Madrid in focus, the government argues that eliminating this program is a step towards facilitating access to affordable housing and combating real estate speculation.

The Sánchez administration maintains that this effort underscores its commitment to ensuring that no citizen allocates more than 30% of their income to housing. However, this announcement has not been without criticism. Detractors argue that the elimination of the golden visa could have significant negative consequences, discouraging investment and adversely impacting the Spanish economy.

One of the central arguments against the program's elimination is the potential impact on FDI. Golden visas have been a significant source of foreign investment, critical for the real estate sector and, by extension, the broader economy, stimulating construction, creating jobs, and generating tax revenue.

The withdrawal of the program could not only reduce FDI but also destabilize the real estate market, which has found foreign investors to be a driver of recovery, especially following the 2008 crisis. Additionally, Spain's international competitiveness could be compromised. With several EU countries and jurisdictions worldwide offering similar programs, Spain could lose appeal as an investment destination compared to jurisdictions that keep their doors open to global investors.

This move could also affect perceptions of the stability and openness of the Spanish economy, critical factors in attracting investments beyond real estate. While the goal of ensuring affordable housing is commendable, critics suggest that there are alternatives to addressing speculation and improving access without sacrificing foreign investment. Policies such as promoting the construction of affordable housing, rental regulations, and the rehabilitation of vacant properties could coexist with incentives to attract investment, striking a balance between economic development and social justice.

In conclusion, while the Spanish government pursues a noble end in its quest for affordable housing, the strategy of eliminating the golden visa raises questions about the long-term economic and investment implications. A more balanced approach, one that does not dismiss Foreign Direct Investment as a tool for development, could offer a more sustainable and less divisive solution in the effort to build a more equitable and prosperous society.

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