Legislative Analysis: Spain’s Golden Visa Termination Timeline

Jacinto Soler Matutes
Barcelona

The Lower House’s plenary ratified the draft law on the efficiency of the Spanish judiciary after Congress’ surprising approval of the bill, which contains a provision that abolishes the investor residence (Golden Visa) in Spain.

Far-left populist party Podemos, which is part of the coalition government and the socialist PSOE, initially proposed eliminating the Golden Visa.

Phasing out the residence options for “the rich” was one of Podemos’ requests to PSOE to support the 2025 budget law.

PSOE thus included this provision in a draft law that has little to do with foreign investment.

While a majority was not, in principle, expected, the approval of the draft law follows yet another block agreement between PSOE and the Catalan regional party Junts, which holds the key to the parliamentary majority.

The Catalan region will manage a larger share of taxes in return for Junts’ support of this and other draft laws currently in negotiation.

The draft law’s new provisions contain the following rules that amend Law 14/2013 of September 27, which enacted the Golden Visa in Spain a decade ago:

• Articles 63 to 67 of Law 14/2013 are deleted, thereby abolishing all forms of investor residence, including real estate, bank deposits, Spanish shares, debt, and mutual funds.
• The government will grant residence permits to investors and dependents who submit their applications before the draft law’s entry into force, as long as they comply with all requirements, even if the government decision takes place after entry into force of the law.
• All holders of investor residence permits under Law 14/2013 can renew them without limits in accordance with the requirements set in that law.

To our understanding, after the draft law enters into force, the provisions do not allow for adding new dependents to a main applicant already holding a residence permit. The government, however, will need to clarify this particular detail later on.

The draft law shall enter into force three months after its publication in the Official Gazette (BOE).

The Senate just received the draft law today and will debate it for a maximum of two months.

The opposition conservative party, PP, which already voted against the draft law in Congress earlier, controls the Senate.

However, the Senate does not have a final legislative power in Spain. It can make amendments and even fully reject a draft law, but Congress is entitled to eventually approve and enact it, neglecting the Senate’s vote and opinion.

In the current “shaky” Spanish political landscape, we can never be entirely sure of any parliamentary outcome, but if the agreement between Junts and PSOE remains in place in the coming months, Congress will most likely ratify and enact the draft law and thus abolish the investor visa in the coming months.

If the weak coalition government of PM Sánchez loses support from Junts, then the parliament would close, and new elections would be called. Then, the draft law would also be placed in the drawer.

Projected Phase-out Timeline

As stated earlier, the Senate has a maximum of two months to debate and vote on the draft law.

If the Senate uses this entire period, which is likely because it will try to drag the process as long as it is possible, I estimate the following timeline:

• November 20: Draft law enters the Senate.
• January 20: End of deliberation at Senate. Draft law returns to Congress.
• February 1: Enactment and publication of the draft law on the official gazette.
• May 1: Entry into force of the law, spelling the end of the Golden Visa.

Approach with Caution

Investors can still apply for the Golden Visa, but they will need to be careful.

Those intending to purchase properties should pay the full amount, thus avoiding the standard purchase procedure in phases (e.g., deposit, earnest money, and final purchase) and moving faster toward registration.

If sellers want to remain in their properties longer, both parties can agree on this and add a clause to the purchase deed.

If the new owner is registering the property under his or her name, as long as they have paid the transfer tax and the bank cancels any mortgage encumbrances, an investor can use it to qualify under the Golden Visa.

Alternative Options

Despite investor visa phase-out, Spain still offers a number of alternative residence options, namely:

• Digital nomad residence.
• Non-lucrative residence.
• Entrepreneurship residence (via business plan).

However, all such options require effective residence in Spain of at least six months per year to renew the permits.