First, the content of the law for entrepreneurs will be demonstrated. Immigrants investing in the Spanish economy in the following ways are eligible for an investor’s visa (or so-called “golden visa”):
- Purchasing shares of resident companies of Spain (the lowest level of purchase must be no less than 1 million euros);
- Opening a deposit in a resident bank of Spain (with a minimum of 1 million euros in the account);
- Purchasing a government bond (for 2 million euros or more);
- Founding a private business in Spain. In this case, it is necessary to confirm the efficiency of the business plan and the creation of new jobs;
Obtaining the residence visa based on a property purchase in Spain. This is the most popular option. The main prerequisite for this option is the price of the object: it should be at least 500 thousand euros.
Since this article is mainly dedicated to property purchase as a tool for obtaining a residence permit, first, a brief analysis of the reasons the new initiative was introduced as well as a study of the current situation of the Spanish real estate market will be beneficial. Before, the lowest price for purchasing a real estate object was not set precisely at the level of 500 thousand euros. Originally, the plan was to establish a minimal value of 200 thousand euros. The rate increase was mainly stipulated by the fact that the new law was designed to attract wealthy investors, especially non-EU residents, to the country, as well as to accelerate the post-crisis recovery of the Spanish economy. It is well known that Spain was badly struck by the world financial crisis in 2008-2009 and incurred significant losses when the property market collapsed shortly afterwards.
Since 2008, the overall property prices in Spain fell by 30%, and in 2014-2015 private property was placed on the real estate market for half of its price in the year 2007. However, even today, when the Spanish economy demonstrates a tendency toward rapid growth and confident recovery, we have not seen an abrupt rise in real estate prices. Their gradual growth creates favorable perspectives for the investment climate in the country. This fact, together with the accumulated stocks of the private property for sale, makes the Spanish market an attractive field for foreign investors. The recent law regarding entrepreneurs in Spain has proven to be a rational step in the overall governmental strategy, and it was adopted at the most appropriate moment. Due to this efficient initiative, Spain has the chance to not only become a leading European country in terms of GDP growth rates in the near future but also to fully recover from the post-crisis consequences.
Another important consideration to keep in mind is that establishing Spanish permanent residency through a property purchase grants its holder permission to work in the country. Moreover, there is no set number of days per year required for the holder to be in the country. These conditions provide a considerable contribution to the development of the Spanish economy while opening new horizons for real estate investors to increase this contribution by conducting labor activity (mainly entrepreneurship) in the Kingdom of Spain.
Residence permit in Spain based on property purchase: key aspects to consider
As mentioned before, the major requirement for this residence type is the property object price, which must be at least 500 thousand euros. Moreover, if the total value exceeds this threshold, it is of crucial importance to demonstrate that the required sum of 500 thousand euros was paid by a buyer from his or her own funds, without resorting to any crediting type. When requesting a residence permit, it will be necessary to present evidence that this sum is free from credit liabilities. The law does not prohibit taking out a mortgage or a loan in a Spanish bank for the remainder of the sum.
Contrary to popular opinion, the property purchase does not automatically mean that the government will not ask an investor to present any proof of financial soundness. In this case, it may be necessary to submit a bank statement, especially one showing the circulation of funds for a specified time, issued by a resident bank in Spain. When applying for a residence visa through property purchase in Spain, IPREM, which determines the minimal sufficient sum necessary to live in the country, should also be considered. As a rule, for immigrants this sum is multiplied by four. In addition, the investor’s family members can also qualify for a residence permit under the same conditions.
The procedure of obtaining a residence permit in Spain based on property purchase
The Spanish law on entrepreneurs distinguishes between two types of documents required for legal residence in Spain: a long-term visa and a residence permit for Spain via property purchase. While a long-term visa is issued for 1 year only, a residence permit, once obtained, expires in 2 years and can be extended for the next 2 years. Overall, these documents grant 5 years, 4 years of which intend for the holder to reside in Spain with a work authorization, while the first year only enables a stay in the country. It is extremely important to understand this difference, since a residence of 5 years allows for eligibility for a residence permit. In addition to the meeting the conditions of the residence permit, an applicant for a long-term visa needs to meet the following requirements for a “golden visa”:
- Be a holder of a long-term visa, the expiration date of which does not exceed 90 days
- Visit Spain as an investor at least once within the visa validity period
- Provide proof demonstrating that the investments in real estate, on the basis of which the visa has been issued, still exist. In other words, evidence showing that the property was not sold promptly after its purchase must be shown.
Additional requirements for immigrants who have decided to buy a property in Spain with the purpose of obtaining a residence permit include:
- Not antecedents of illegal residence
- Older than 18 years of age
- Absence of criminal records in the past both in the country of origin and in Spain
- Medical insurance that covers the duration of residency
- Evidence of financial solvency: 2128 euros/per month + 531 euros/per month for each family member (calculated based on IPREM)
The documents for obtaining a residence permit in Spain through a property purchase are submitted to the local police department or the Immigration Affairs office. The application for a long-term D visa is submitted directly to the Spanish consulate in the country of your residence. The processing time for the application takes from 10 to 20 days.
If you have any questions about the residence permit in Spain based on property purchase, contact our specialists at the INEEDSpain service center. We are always ready to consult with you on any questions you might have and assist you in the preparation of the required documents for your visa application.