SPAIN, April 9: The Spanish government announced on Monday its intention to terminate a visa program that grants residency permits to non-European Union citizens who invest a minimum of 500,000 euros, equivalent to $542,805, in real estate. According to the Associated Press, approximately 10,000 such visas have been issued since the program's inception in 2013.

Details regarding the conclusion of the golden visa program remain undisclosed, leaving uncertainties regarding the fate of individuals who have already invested in or relocated to Spain through this initiative.

Introduced by European countries in the aftermath of the global financial crisis to bolster their economies, visas for foreign investors have attracted individuals seeking to settle in nations with favorable political, cultural, or business environments. However, governments like Spain, which once offered these visas, now perceive them as a political liability, especially amid growing concerns over affordable housing, particularly for young citizens.

Over the past year, several European countries, including Ireland, the Netherlands, Portugal, and Greece, have either terminated or tightened their golden visa programs for similar reasons.

Spain's decision to reform its visa program coincides with escalating home prices, exacerbating affordability challenges, particularly for young people grappling with high unemployment rates. According to the OECD, the average age at which young Spaniards leave their parental homes rose to 30 years old last year, surpassing the EU average of 26.

Prime Minister Pedro Sánchez highlighted that the majority of foreign property investments are concentrated in major Spanish cities like Barcelona, Madrid, and Valencia, all of which are grappling with housing shortages. Sánchez emphasized that it has become "almost impossible" for residents who live, work, and contribute taxes in these cities to find suitable accommodation.

Meanwhile, average rental prices in Spain have surged by 40% over the past decade, while young people's salaries have experienced less than 10% growth, as per OECD data.

Despite discontinuing the golden visa program, Spain will continue to attract foreign individuals through its digital nomad visa, which was launched last year. Unlike the golden visa, the digital nomad visa does not require investment and does not offer a pathway to citizenship.

Investment migration consultancy Henley & Partners reported a surge in inquiries from Americans seeking residence and citizenship by investment in 2023. Portugal's revamped visa program, which now mandates investments in areas beyond real estate, emerged as the preferred option for the firm's US clients.

Beyond Europe, similar visa programs have gained traction. In 2011, New Zealand granted citizenship to billionaire PayPal cofounder Peter Thiel, who spent only 12 days in the country but made significant local investments. However, following a housing affordability crisis in 2018, New Zealand banned foreigners from purchasing existing homes, echoing Spain and Portugal's current predicament.