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The programme of granting residence permits in exchange for investment in Spanish property has ended

January 13, 2025

Foreign investment in Spanish property creates problems for the market

In 2025, the programme for obtaining a residence permit in exchange for investing in property in Spain was discontinued. The reason for the closure of the Golden Visa was the problems of the local market. High demand from foreigners led to an increase in property prices and a shortage of supply.

What is behind the government’s decision

According to La Region, the local PSOE party initiated the closure of the investment programme. It was supported in parliament, and since January this year, the Golden Visa has stopped accepting new applications.
The programme was popular with foreigners who wanted to obtain a residence permit in exchange for buying a property worth €500,000 or more. One of the main advantages of this programme was the possibility of staying freely in Schengen countries.
For several years, the EU government has expressed concerns about the potential risks associated with the Golden Visa programmes. The main problem was the potential for these initiatives to be used for money laundering. In response, and under pressure from the European Parliament, the Spanish government decided to end the Golden Visa programme.
News of the programme’s closure caused an unprecedented stir. In August 2024, the number of applications increased threefold. Many investors rushed to join the programme in order to continue enjoying its benefits.
Prime Minister Pedro Sanchez cited the housing crisis as the main reason for closing the programme. According to the authorities, the move will help stabilise the market and make it easier for citizens to buy property. However, a number of experts disagree with the government’s decision. According to them, closing the programme will not solve the market’s problems.

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Market forecasts for 2025

The property market in Spain has been growing for several years. Several factors have contributed to this:
– in 2024, GDP will increase by 2.5%;
– GDP growth forecasts for 2025 are 2.1%;
– lower interest rates are stimulating demand for housing;
– the purchasing power of citizens is increasing.
The impact of the above factors has led to an increase in the country’s cost of housing. This trend is particularly noticeable in major cities and tourist resorts. According to CaixaBank Research, prices rose by more than 4% in the third quarter of 2024. Analysts expect this trend to continue in 2025.
Experts cite limited supply and high demand as the main reasons for the increase in housing costs. Investment in new properties is forecast to grow by 15% in 2025. The most profitable investments will continue to be in properties in major cities and resorts, which are attractive due to the increase in tourist flows and rental prices.

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