The Golden Visa: property investment in Spain for residency

If you’re looking to make a property investment in Spain, then you may be interested to know that it could also open the door to Spanish residency through the Golden Visa.

The Golden Visa in Spain is a residence visa issued to non-EU nationals making a significant investment in Spain. One of the options is property investment to the tune of €500,000 upwards. The Golden Visa was designed to attract affluent third-state nationals to the country. This applies to Americans and, post-Brexit, British nationals as well.

Property Investment in Spain for a Golden Visa

Most investors choose the real estate option when it comes to investing for a Golden Visa in Spain, which is why it is often known as the property visa.

There are a number of qualifying criteria, but it is the investment amount required that is the major factor. To obtain a Golden Visa through property investment, you must invest a minimum of €500,000 in Spanish real estate. This can be residential, commercial or a combination of both.

A residential property does not have to be your primary or permanent residence. It requires the proof, within three months of purchase, through a Land Registry issued certificate, that you paid at least the qualifying minimum amount for the property.

If you are in the process of purchasing property, you can still submit the preliminary contract and letter from a Spanish financial institution confirming availability of the required funds.

There are a few additional eligibility criteria. You must:

·   Not have a criminal record

·   Not be on Spain’s list of undesirable people

·   Not have been refused visas or entry into the Schengen zone

·   Be over 18 years of age

·   Have health insurance which covers you in Spain

Golden Visa Benefits

There are many advantages to having a Golden Visa, the greatest of which is freedom to travel visa-free around the Schengen area.  With a Golden Visa in your possession, the Schengen area is open to you on the same footing as EU nationals. That means no queues at passport control.

There are further benefits, which include:

·   You can live and work in Spain legally

·   You can bring your family members with you (spouse, dependent children/parents)

·   You and your family members have access to public services

·   You don’t have to live in Spain permanently to renew the visa       

.   It’s a pathway to citizenship; you need to live in Spain for 6 months every year, for 10 tears

How long is the visa valid for?

The initial Golden Visa is valid for a year. During that time, you must enter Spain and exchange the visa for a residence permit. The permit is valid for one or two years.

You can renew your residence permit as often as you like. The only requirements are to maintain your investment and travel to Spain to renew.

What about tax liabilities?

When make a property investment in Spain and obtain the residence permit, you are liable to some tax. Which ones and how much depends on the amount of time you spend in Spain during a year. If you stay in Spain for more than 6 months, you’re counted as a Spanish resident. That means your worldwide assets and income will be taxed in Spain.

If you stay in Spain for less than 6 months in a year, you only pay taxes on the initial purchase of your real estate and thereafter on the value of your assets in Spain.

Can I use a loan to buy the property?

As a minimum, the first €500,000 of the purchase price must be paid in full with your own money, in other words not through the use of a loan or mortgage. If the property is valued above €500,000 a loan may be taken out for the balance.

You also need to be the sole investor in the property. If there are multiple investors, for example purchasing a commercial property with business partners, then your share must equal €500,000 or more Otherwise, you will not qualify for the Golden Visa in Spain.

For property investors, the Golden Visa is an attractive benefit. Whether the property is to be your permanent residence, second home or an investment property, buying in Spain is worthwhile. 95% of Golden Visas are obtained through property investment, of which almost 26% were in Andalucia in 2019.

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