Foreigners are Driving the Housing Market in Spain

31 January 2019 – Eje Prime

Foreigners are boosting house sales in Spain. The number of transactions undertaken by foreign residents in Spain is on track to set a new record, with almost 70,000 sales during the 9 months to September 2018, according to the latest data available from the Ministry of Development.

Since 2010, the purchase of homes by foreigners has more than tripled, from just 21,576 transactions during the first nine months of that year. The major boost came with the approval of the so-called golden visa in 2013, a measure to facilitate visas for real estate investments in Spain amounting to more than €500,000.

Since then, real estate investment by foreigners has doubled. The País Vasco, Cataluña and Castilla-La Mancha have been the regions where transactions have been boosted by the most since then, with multiples of six, five and four, respectively.

In the last year, the drivers have been the sun and the beach, and the central area, with double-digit increases in Murcia and the Castillas. Meanwhile, on the islands and in Cataluña, the number of operations involving foreigners has decreased.

The promise of the golden visa

(…). The PP Government introduced the golden visa model in Spain, in which thirteen member states of the European Union currently participate (…).

In fact, it is the most used element of that legislation: until October last year, it was used by 546 people, according to the Ministry of Foreign Affairs, almost equalling the figure for the whole of 2017, when 563 residency permits were granted to foreigners acquiring property for more than €500,000.

At the end of last year, the European Parliament started to place the focus on this visa policy, warning that it was opening the door to crimes such as tax evasion, corruption and money laundering.

In a report, compiled by the MEPs Ludek Niedermayer (Europe’s Partido Popular) and Jeppe Kofod (Socialists and Democrats), the European Parliament warned that the economic benefits of such programs do not compensate the “serious risks” of money laundering and tax evasion, and called on the Member States to withdraw from these types of schemes “as soon as possible”.

Original story: Eje Prime (by C. De Angelis)

Translation: Carmel Drake

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