British investors are at the top of the list of applicants for the Spanish Golden Visa in 2021, and it appears that this year will set a new record for the number of residence permits issued.
Good news for the Spanish real estate market. The coronavirus pandemic paralyzed and, in some cases, cancelled many investment operations in 2020, but the market has recovered in the first seven months of this year. The number of ‘golden visas’ granted so far in 2021 is one indicator of how quickly this recovery occurred.
The Ministry of Foreign Affairs recently confirmed that it has issued 324 ‘golden visas’ so far this year, while only 394 foreigners obtained Golden Visa permits thanks to a real estate investment of more than 500,000 euros in all of 2020.
Real estate has long been a major draw for foreign capital in Spain. According to Foreign Ministry data, the State granted a total of 681 ‘golden visas’ to foreigners who spent more than 500,000 euros on the purchase of one or more real estate assets in 2019. It broke the previous record of 658 visas granted in 2016.
The Golden Visa is by far the most common method of obtaining Spanish residency through investment. This can be accomplished in three ways. The most “expensive” way is to invest a sum equal to or greater than two million euros in Spanish public debt securities, or a sum equal to or greater than one million euros in Spanish company shares or social participations, or bank deposits in Spanish financial entities.
The second and most popular option is to obtain a “Golden Visa” by purchasing real estate in Spain for an amount equal to or greater than 500,000 euros.
The third and most ambiguous option is to obtain a business license for a project that will be developed in Spain and will be of general interest due to the creation of jobs, the realization of an investment with a relevant socioeconomic impact, or a relevant contribution to scientific and/or technological innovation.
Because of the lower interest of potential applicants and the Administration’s inability to act on the requests, the Covid 19 pandemic nearly halted the process of granting visas. Many potential buyers were also unable to view their prospective properties due to the lockdown. However, once the restrictions were lifted in June of last year, applications began to be approved again . The quick recovery of the real estate sector also aided this process.
According to some analysts, the number of applications has even increased by 17 percent when compared to record 2019. The main reason could be the arrival of a new player in the Golden Visa market – the British. This is the first year in which a Golden Visa has become the best option for British citizens seeking residence in Spain after Brexit.
So far in 2021, British investors have topped the list, followed by those from the United States, Russia, India, Colombia, China, and Canada.
Since its inception in 2013, the Golden Visa program has been fraught with controversy. So far, fewer than 5.000 people have obtained this permit, investing less than €3 billion in a trillion-euro economy like Spain. While some argue that this Visa is insignificant for the extremely busy property market, where sales to foreigners amount to tens of billions of euros each year, others argue that the program is failing because the bar is set too high, and it should be reduced to a lower amount, as in Portugal or Greece. Many analysts believe that as money laundering controls tighten, this visa will become less popular.