Tourism in Spain has attracted large numbers of investors to the real estate market due to its rapid growth; the sector is booming, with record numbers of tourists arriving from various countries, which has paved the way for a significant increase in the number of hotel accommodations in recent years. However, it is noted that the majority of tourists prefer to stay in private rentals, a trend that has troubled the hotel sector.

Stimulating Foreign Investment

To encourage investment in the Spanish real estate sector, the government issued a document granting residence permits to real estate investors from outside the European Union, which has now become law, following the King’s approval and parliamentary ratification, and was published in the Official State Gazette (Boletín Oficial del Estado, BOE), meaning the law is now in effect. The law’s publication in the Official Gazette alleviates any doubts foreign investors may have.

This document covers everything you need to know about the new law granting a residence permit in Spain in exchange for investment in the Spanish real estate sector (known as the “Golden Visa” law), and how non-EU citizens can use real estate investment to obtain a residence permit in Spain.

Restrictions on Property Use
Spanish real estate prices have begun to rise after a significant decline during the recent global financial crisis, creating excellent investment opportunities. This has made it an attractive offer that includes a residence permit and clearance prices for investors from outside the European Union, Spanish legislation does not impose restrictions on how the property is used or invested; investors may use their property in any legal manner (such as renting it out) in accordance with planning permits, zoning laws, and other local land-use regulations.

Real Estate Investment Threshold
The government has set the minimum threshold for real estate investment at 500,000 euros per investor.

To apply for a residence permit, proof of the investment(s) must be submitted along with the real estate registration certificate. If the certificate is not available, notarized contracts or proof of submission of the contracts to the Real Estate Registration Department must be provided.

Non-EU foreign residents may invest in the following real estate sectors:

• One or more properties that meet the minimum investment value.
• Residential, tourist, and rural properties, as well as commercial and industrial properties.
• Rural land, developed land, buildings under construction, or dilapidated buildings.

Buying and selling through an agent

The Spanish government has enacted additional legislation to attract foreign investors, granting them a 90-day visitor visa during which they can search for a suitable property. After the purchase, the investor registers a general power of attorney granting your lawyer the authority to act on your behalf to complete the residency procedures and transfer of ownership.

The investor can purchase the property without traveling to Spain by arranging a general power of attorney from their home country that grants the lawyer the authority to act on your behalf to complete the residency and property transfer procedures, The lawyer can then purchase the property on the investor’s behalf, without the need to travel to Spain at this stage.

Financing
Investors must use at least 500,000 euros of their own funds, which must come from transparent sources subject to existing anti-money laundering legislation and other relevant laws.