Spanish real estate visa limit leaves potential investors disappointed
The Spanish government has announced its intention to set its investor visa at the €500,000 limit. The legislation is expected to be passed in July and any buyer investing in Spanish property above this limit will gain a residency visa. La Vida Spain has been working with international visa specialists ready for the launch which has been eagerly awaited for over six months.
Although a climb down from the bold €160,000 limit announced by Prime Minister Mariano Rajoy back in November 2012 it is good news for wealthy investors who have been waiting six months for the government to clarify its position. At the time Spain was trying to secure a second EU bailout and such policy announcements showed determination to address the economic problems. Seen initially as a policy option to help Spain’s property crisis the change of heart to a €500,000 limit, similar to that of neighbouring Portugal, is likely to limit the numbers of international buyers able to qualify.
La Vida Spain works with all the major Spanish banks in helping clear their unwanted property portfolios and is one of the largest sellers of Spanish bank owned real estate to the international market.
However a recent review of stock levels with three of the largest banks shows a striking lack of availability at this price level. With tens of thousands of properties available in total, La Vida Spain found just 83 properties priced over €500,000. The gap between luxury and lower end property is set to widen further with the new policy.
This is likely to lead to price inflation at the €500,000 level and above as a high level of demand chases a limited supply. Investors should expect price adjustments on properties above €400k too as sellers adjust their pricing to take advantage of demand at the €500k price level.
La Vida Spain Managing Director Paul Williams says “we have received over one thousand enquiries worldwide since news of the scheme broke back in November 2012. How many of these potential buyers can afford the new limit remains to be seen. The Spanish government is missing a huge opportunity”
Recent comments on the spainvisas.com blog run by La Vida Spain reveals disappointment among many potential investors at the new limit which the government has set.
At this stage it is not clear whether the Spanish government will allow the purchase of multiple properties to achieve the €500,000 qualifying limit. This is expected to happen as part of the wider entrepreneur investment visa scheme. Investors in multiple properties are likely to be looking at rental yield and should seek advice from La Vida Spain on locations most appropriate to achieve this.
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