Spain’s Golden Visa rules debated as investor interest grows
29 July 2013
The details of Spain’s Golden Visa residency-for-property rules have now been published and agents report rising interest from overseas investors. Rather than only being allowed to purchase one home for up to €500,000 to qualify, applicants can buy several properties of different kinds to make up the total. Residential, commercial and land deals all qualify.
One leading agent says that rather just looking at property around the entry point, many investors are putting together investment portfolios of €1million that includes both residential and commercial property.
Another reports a surge of interest, with inquiries up by one-third. The regulations are currently being debated by the Spanish parliament, but solicitor Antonio Berdonces Vivancos thinks they will be unchanged. He tells OPP Connect, “I firmly believe that the final law will be exactly the same. The interesting thing about this is the details.
The real estate agents have been expectant for the details.” Mr Vivancos, from Interlaw, which has offices in Murcia and Almeria, says the scheme will give Spain an advantage in attracting overseas property investors from outside the European Union. “I don’t know if there will be a rush, but it does give Spain an additional advantage.
“There is demand from China for all the advantages Spain brings in terms of education for their children and university. The possibility of getting places in university in China is small, so they seek opportunities to educate their children overseas.” Agent Steve Long, Director of RightBuyHomes.com in Spain, tells OPP Connect that most interest has come from wealthy Indians and Canadians.
The fact that the Spanish government increased the qualifying point from €160,000 to €500,000 has meant that more committed investors are inquiring.
“It is quite positive. People have not been just jumping on the bandwagon but are serious investors who are using their brains to put together say a villa and retail units. One million euros is the going rate.” Mr Long says demand has been strong from Indian investors looking for opportunities in Majorca and from Canadians interested in Barcelona.
But, so far, the response from the Chinese and Russians has been more muted. “I keep hearing about that the Russian and Chinese market is where the interest is, but I am not one hundred per cent convinced. “Our interest is from Indians, Canadians and Australians – perhaps because we are English-speaking. Chinese and Russian business may be aimed more at specialists. “You hear a lot about the Chinese market, but I don’t know any agents who are physically selling to the Chinese.It might happen, but I don’t think it is there at the moment.” Luxury international estate agency Lucas Fox says it is receiving up to 30 enquiries a day from foreign investors, mainly from the Far East, India and Russia.
To meet the boost in demand, it has established a new company, Residency in Spain, a joint venture with Spanish Law firm ECIJA. It offers tailor-made advice and support on obtaining residency through property investments, tax planning and associated legal and immigration issues.
So far the majority of the clients enquiring are English-speaking, with around 60% from the Far East and China. Spokesperson, Carrie Frais, tells OPP Connect, “We have agreements signed with partners in the main non-English speaking territories – China and Russia. They are busy registering potential clients that approach them, but will really only swing into action once the final law is passed (our lawyers are saying by the end of the summer). We are also working on partnerships with India.
“So far, we have around two hundred direct clients who have said they will purchase dependent on the final conditions of the law being as per the anteproyecto [draft].” The regulations are being debated in the Lower House, the Congress of Deputies, and are expected to become law in autumn 2013. The residence visa would allow those who invest €500,000 or more to live legally in Spain for two years, and can then be renewed every two years.
The kind of investment that qualifies is one or more residential, touristic, rural, commercial or industrial properties, plus developed land, buildings under construction or decrepit buildings. The total investment must be free of liens or encumbrances. After five years of continuous residence, applicants can apply for an unlimited residence permit and after 10 years of residence, they can apply for Spanish nationality.
There is no requirement that any property is intended for a specific use, so it can be used for total or partial leasing, or to use it for business activities.
Alternative investments can be made of at least €2million in Spanish government bonds or €1million in stocks or shares in Spanish companies, or bank deposits in Spanish banks. Applicants must be over 18 years old, have no criminal record or be listed as unacceptable in Spain, have valid health insurance and have enough personal economic resources.
Mr Long says one interesting point is that a decision on residency applications must be made within 20 working days. “Once the application has been submitted and accepted, the authorities have to act very quickly to reject it, otherwise it automatically goes through. “We were worried how long it would take and whether it would get tied up in bureaucracy.
But the authorities have got round that and have put themselves under pressure.” The UK-based Association of International Property Professionals (AIPP) has sent the draft regulations to all its 35 Spanish members to ensure they are kept informed.
See more at: OPP