(MENAFN) In a move aimed at tackling the pressing issue of housing affordability, Spain has unveiled plans to dismantle its renowned 'golden visa' program, a scheme granting residency rights to non-European Union property buyers. Prime Minister Pedro Sanchez revealed the government's intention to initiate the process of abolishing the program, signaling a significant shift in policy direction towards prioritizing access to affordable housing for local residents.
Since its inception in 2013, the golden visa initiative has allowed non-European Union citizens investing a minimum of EUR500,000 (USD543,000) in real estate to secure residency and work privileges in Spain for a three-year period. However, concerns over the program's implications on housing affordability and market dynamics have prompted the government to take decisive action.
Prime Minister Sanchez emphasized the need to transition from viewing housing as a speculative commodity to recognizing it as a fundamental right for all citizens. He asserted that the dominance of real estate investments under the golden visa scheme has exacerbated housing challenges, particularly in major cities grappling with strained housing markets and soaring prices.
Government data reveals that Spain has issued nearly 5,000 golden visa permits since the program's inception, with Chinese investors ranking highest in terms of participation, closely followed by Russian investors who have injected over EUR3.4 billion into the Spanish property market. However, critics argue that the program has contributed to inflated housing prices rather than addressing the underlying supply-demand imbalance.
While proponents of the golden visa abolition assert that the move will alleviate housing affordability pressures, some economists caution against attributing Spain's housing woes solely to the program. They argue that the root causes lie in insufficient housing supply and surging demand, necessitating a multifaceted approach to address systemic issues within the housing market.
Critics of the government's decision, including property website Idealista, contend that focusing on international buyers overlooks the fundamental issue of inadequate housing supply. They assert that abolishing the golden visa program may fail to address the underlying challenges driving housing affordability concerns, emphasizing the need for comprehensive reforms to foster sustainable solutions.
As Spain embarks on the process of phasing out the golden visa scheme, the move underscores the government's commitment to reshaping housing policies to prioritize the needs of local residents and address systemic challenges within the housing market.
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