Numerous elements attract people from all over the globe to Barcelona: the famous architecture, a rich culture and culinary masterpieces to name but a few. Therefore it should come as no surprise that this Spanish hotspot has become a firm favourite among those who seek a Mediterranean lifestyle, as well as those who are considering investing in real estate.
However, like all great things in life, certain steps need to be taken – and it is no different when it comes to the Spanish Golden Visa.
What is a Golden Visa?
The Golden Visa scheme, first introduced by the Spanish government in September 2013, was designed to attract foreigners wishing to invest in real estate in the country and, thus, enhance the property market. This program is a vital element when it comes to gaining residency in Spain, and even though it is flexible in terms of its family options, it is quite restrictive regarding the route to citizenship.
And there definitely seems to be a market for it, as the Spanish Government has issued 24,500 visas since 2013, with 11,774 going to principal investors, and 12,731 to family members.
The main attraction of the Golden Visa is that it allows non-residents to be in Spain for two years, as opposed to the usual 90 days (anybody who resides two years in Spain or spend more than 183 days/six months in one calendar year in the country, not necessarily consecutively, becomes liable for resident tax). In addition, there is no minimum amount of time that an applicant has to spend in Spain before renewing it, and the 2015 update has made the renewal process considerably easier.
Furthermore, the applicant doesn’t have to become a tax resident in Spain and, if desired, can sell the purchased property after five years.
Another fantastic benefit is that Golden Visa holders can move freely in the Schengen Area, a zone comprising 26 European states that have officially abolished passport and all other types of border control at their mutual borders and which includes many of Europe’s most desirable locations.
Finally, it is worth taking into account the relative stability of the market to which the Golden Visa provides access. While Spain has suffered economic problems in the past, the gradual and consistent growth of its real estate market appeals to many people worldwide.
All of this has made the Golden Visa an extremely convenient path to Spanish citizenship.
What is required?
A minimum amount of €500,000 is required to invest in real estate in Spain. The property (or number of properties combined to make up the required amount) can be rented for income and be of residential, commercial, rural, touristic, or industrial nature.
Joint buyers can combine investments into one property (provided that each buyer fulfills the requirement for €500.000). If desired, the property can be mortgaged for any investment exceeding the minimum.
Along with the real estate investment, applicants will need a clear criminal record, medical insurance and sufficient economic means to cover any stay in Spain. Applicants also could not have been previously refused visas or entry into the Schengen Area.
How to proceed
It is recommended that the applicant visit Spain to choose the relevant property/ies for their investment, although it is possible to purchase real estate through power of attorney without being inSpain. Note that the applicable funds need to be investment-ready in a bank account in Spain.
Once the purchase is finalised, the attorney applies for the first one-year investor visa on the applicant’s behalf, which allows free travel inside the EU’s Schengen Area. The authorities issue this visa in Spanish Embassies and Consular Offices. The application process generally takes between 10 – 15 days.
It is issued for two years, if applied for in Spain, and can then be renewed for a further five years provided the investment is maintained. Full Spanish citizenship can be obtained after 10 years.
Lawyer fees will vary depending on family size and situation; however, it is recommended to have at least €8,000 for a family application. In addition, a government processing fee of €70 per applicant also applies.
Buying real estate in Spain attracts certain taxes, stamp duty and fees. It is advisable to budget an additional 11-12% of the property value in total, the main element being VAT (IVA). In addition, there are conveyancing fees, typically around 1.0% of the property purchase price.
For more information regarding Spanish property taxes and associated costs, see The Buyer’s Guide to Purchasing Property in Barcelona.
Investors are only taxed on their worldwide income once they are resident in Spain for more than 183 days in a year. For non-resident individuals, tax is charged at 24.75% on income derived in the country, such as rental income.
Annual property taxes are payable to the local authority, usually €200 – €400 annually for an apartment.
Since amendments to the Golden Visa program in July 2015, the scheme has become more successful, with investments rising 63% between December 2015 and October 2016. Investing in real estate has been the most popular choice by far, representing 77% by value and 94% by transactions.
Interestingly, the Russians and Chinese seem to be the biggest investors in the Golden Visa, with Chinese favouring the Spanish capital Madrid, while Russians seem to prefer Málaga, Valencia City, and Barcelona.
Although not the only country with Golden Visa rewards, Spain continues to offer immeasurable lifestyle benefits in comparison to many neighbouring EU nations:
- Its property market is currently extremely optimistic, with recent figures indicating that prices are stabilising and, indeed, starting to rise across Spain, particularly in prime centrally located areas such as Barcelona and Madrid.
- Spain boasts excellent communications links, including several international airports and fast-speed ‘AVE’ trains, enabling efficient travel throughout the Schengen Area.
- Spain offers fantastic lifestyle benefits: a recent study by Eurostat revealed that Spanish people live the longest in Europe, with life expectancy being an extremely positive 83.2.