Spain has officially terminated its Golden Visa program as of April 3, 2025, leaving many potential expats and investors searching for alternative pathways to residency in the sunny country. This significant policy change, announced by the government of Prime Minister Pedro Sánchez, aims to address the ongoing housing crisis that has made property increasingly unaffordable for ordinary Spaniards.
Launched in 2013 under former Prime Minister Mariano Rajoy, the Golden Visa program allowed non-EU nationals to gain residency by investing at least €500,000 in Spanish real estate. Over the years, the initiative proved popular, with a total of 14,576 Golden Visas issued, primarily through real estate investments. In fact, 95 percent of these visas were granted for property purchases, significantly boosting the Spanish economy.
However, the influx of foreign investment has contributed to soaring housing prices in major cities like Madrid and Barcelona, making it increasingly difficult for local residents to find affordable homes. Criticism of the program intensified, leading Sánchez to declare in April 2024 that housing should be recognized as a right rather than a speculative business. This sentiment was echoed in the decision to scrap the Golden Visa program, which was officially approved by the Congress of Deputies in December 2024, with 177 votes in favor and 170 against.
The termination of the Golden Visa program has left many wondering about their options for moving to Spain. Fortunately, there are still several legal avenues for foreigners looking to invest or relocate. For instance, one alternative is to operate through a foreign holding company, with Luxembourg being a popular choice. This method allows investors to control Spanish property while avoiding Spain’s personal income tax (IRPF).
Another option is to establish a Spanish limited company, which incurs a 25% corporation tax but offers deductible business expenses, potentially offsetting some of the tax burden. For high-end investors, Spain’s SOCIMIs (Sociedades Anónimas Cotizadas de Inversión en el Mercado Inmobiliario), which are similar to real estate investment trusts (REITs), provide significant tax advantages. These include a 0% corporate tax rate, 20% rent exemptions, and a 95% reduction on transfer tax (ITP), provided the investor meets specific criteria, including owning three assets and having a portfolio of at least €5 million.
For those not interested in establishing a company, the Beckham Law offers an attractive tax regime for employees moving to Spain. This law allows qualifying individuals to be taxed only on their Spanish income at a flat rate of 24% up to €600,000, while income earned abroad remains untaxed in Spain. However, applicants must submit their application within six months of arrival to benefit from this advantageous tax treatment.
Additionally, several regions in Spain, including Madrid, Andalucía, and Galicia, provide various tax deductions and exemptions that can ease the financial burden for new residents. These include 100% relief from wealth tax, a 99% reduction in inheritance and gift tax, and up to a 20% deduction on IRPF for investments in startups or state bonds, thanks to the so-called Mbappé Law.
Remote workers have also found a new pathway through Spain’s Digital Nomad Visa, which has gained popularity since the Golden Visa's termination. To qualify, applicants must have a foreign work contract, stable income, and approximately €25,000 in savings. This visa not only allows individuals to live in Spain but also offers a tax rate of just 24% on their Spanish earnings for up to five years, making it an attractive option for those looking to enjoy the Spanish lifestyle.
Despite the apparent boldness of the government’s decision to eliminate the Golden Visa, many observers question whether this policy shift will effectively address the underlying issues of the housing market. While Sánchez's administration may have garnered favorable headlines with the termination of the program, the reality remains that foreign investment is likely to continue flowing into Spain through alternative channels.
In conclusion, while the Golden Visa may be gone, savvy investors and expatriates can still find ways to enter the Spanish market legally and take advantage of the country's favorable tax environment. As the landscape evolves, those with the right advice and resources will continue to navigate the complexities of Spanish residency and investment opportunities.
For those considering a move to Spain or looking to invest, it’s essential to stay informed about the latest developments in immigration and tax legislation. Consulting with a qualified tax advisor or legal expert is highly recommended to ensure compliance with current regulations and to make the most of available opportunities.
