Significant Changes in Spain's Property and Residency Rules Affect Expats in 2025

Spain is poised to implement major changes in its property and residency rules, which will significantly impact expats and non-resident buyers. Here’s what you need to know:

End of the Golden Visa Program

The Spanish Congress has voted to end the Golden Visa program, which has been a popular route for non-EU citizens to gain residency in Spain through property investment. Launched in 2013, this program allowed investors to obtain residency by investing at least €500,000 in Spanish property, with minimal stay requirements. However, applications for the Golden Visa will no longer be accepted after April 2025. Existing visa holders can still renew their visas, but new applicants must act swiftly to meet the deadline[3].

100% Property Transfer Tax for Non-EU Buyers

In a bid to address the country's housing crisis, Spanish Prime Minister Pedro Sánchez has proposed a drastic measure: a 100% tax on property purchases by non-EU, non-resident buyers. This means that foreigners buying residential properties in Spain could face a tax equivalent to the full value of the property, effectively doubling the cost of the purchase. This proposal is part of a 12-point strategy aimed at tackling soaring property prices, rental costs, and the scarcity of affordable housing for Spanish residents[2][5].

Reasons Behind the New Tax

The Spanish government argues that non-EU buyers, who purchased 27,000 properties in 2023 primarily for speculation rather than as primary residences, are contributing to the housing crisis. Prime Minister Sánchez emphasized that this speculation is exacerbating the shortage of homes available for local residents, particularly in cities like Barcelona and Madrid where housing prices have surged significantly[2][5].

Alternative Residency Options

While the Golden Visa program is ending, there are alternative routes for expats to secure residency in Spain. These include the Non-Lucrative Visa, which requires proof of sufficient income and full-time residency of six months a year, and the Digital Nomad Visa for those working remotely for companies outside of Spain. Additionally, expats can consider staying in Spain for up to 90 days out of every 180 days on a tourist visa[3].

Impact on Expats and Property Market

These changes are expected to make Spain less attractive for non-EU buyers seeking residency through property investment. The increased costs and more complex residency processes may lead to a drop in high-value property demand. This shift could benefit other European countries like Portugal, Italy, and Greece, which may see an increase in expat interest due to their more favorable residency and property investment conditions[3].

Government's Broader Housing Strategy

The proposed 100% tax is just one part of the government's comprehensive plan to address the housing crisis. Other measures include tax relief for landlords offering affordable rents, more protection for existing tenants, and initiatives to promote the construction of new homes and the renovation of old and empty properties for affordable renting[2][5].

As Spain navigates these significant changes, expats and potential buyers must stay informed and adapt to the new landscape to avoid costly mistakes and ensure their overseas dreams remain viable.