Spain’s Bold Move Has Investors Panicking – Here’s Why 

If you’ve been to Barcelona, you’ve probably noticed the “tourists go home” graffiti plastered on walls around the city. But what might surprise you is that it’s not just the tourists that some Catalans want to keep at bay—it’s the investors, too. With strict new regulations, Barcelona is setting firm boundaries on short-term rentals, making it clear that the city’s housing should prioritize residents over profits. Here’s how these changes are reshaping Barcelona’s property market and what it means for both locals and investors. 

Barcelona’s Short-Term Rental Crackdown 

Barcelona is taking bold steps to tackle the rise in short-term rentals, a trend that’s been driving up housing costs and straining local neighborhoods. With new regulations aimed at reclaiming housing for residents, the city is making it clear that short-term tourism rentals are no longer a top priority.  
 
These changes mean a lot for investors and locals alike, reshaping Barcelona’s property market and the daily life of its communities. 

Overview of New Regulations

The city plans to cancel over 10,000 tourist apartment licenses by 2028, dramatically cutting the number of short-term rental options. For rental investors, this is a big shift, pushing them to consider long-term rentals or other types of investments in Barcelona. This shift will help ease the housing crunch, but it also means a major change in the types of returns investors can expect in the coming years. 

How Barcelona’s Short Term Rentals Affect the Property Market

Impact on Housing Prices

These rules come as a response to Barcelona’s housing prices, which have shot up by nearly 70% over the past decade. As rents and purchase prices rose, locals found it harder to afford homes, especially in tourist-heavy areas. By cutting back on tourist rentals, Barcelona hopes to calm down the housing market, making it more accessible to local residents and reducing the pressure on prices. 

Community Impact

The crackdown on short-term rentals is a big win for Barcelona’s residents, who’ve long dealt with rising rents, crowded streets, and neighborhoods that feel more like tourist zones. By freeing up more homes for locals, the city aims to restore a sense of community and make neighborhoods more livable.  

For investors, these changes mean it’s time to rethink strategies, focusing on options that align with the city’s goal of putting residents first. 

Spain Golden Visa Changes: What Investors Need to Know 

Spain’s Golden Visa program has long been a gateway for foreign investors seeking residency in the country, with real estate purchases being one of the primary routes to secure it. However, recent regulatory shifts suggest that this popular investment option could be on its way out. Here’s everything investors need to know about the Golden Visa’s future and how it could impact the Spanish property market. 

Background on Spain’s Golden Visa

The Golden Visa program was designed to attract foreign investment by offering residency to non-EU nationals who invest in Spain. Real estate has been one of the most common paths for applicants, with investments of at least €500,000 in property qualifying individuals for the visa. This initiative has brought significant capital into the Spanish market, particularly in cities like Madrid and Barcelona, where foreign buyers have contributed to the property boom. For many, purchasing property has not just been a financial decision but a lifestyle choice, securing access to Spain’s warm climate, rich culture, and EU benefits. 

Proposed Reforms on Spanish Golden Visa Investment Options

The Spanish government is now looking to overhaul the Golden Visa program by eliminating the real estate investment route. The goal is to address the country’s housing crisis and curb speculative investments that have driven up property prices, making it harder for locals to find affordable homes. Here are the key points: 

• Elimination of the real estate route: Real estate will no longer be an option for securing a Golden Visa, marking a significant shift for investors. 

• Focus on other investments: Investors may still qualify by contributing to sectors such as business, innovation, or job creation. 

• Housing affordability: The reforms aim to reduce pressure on the housing market and prioritize affordable homes for local residents. 

Timeline and Status 

The proposed reforms are still under discussion, with no set date for when the real estate route will be officially closed. For now, investors can still purchase property in Spain to qualify for a Golden Visa, but it’s crucial to keep an eye on legislative updates. The government has signaled its intent to push forward with changes in the coming years, so it’s wise to act sooner rather than later if securing a Golden Visa through real estate is the goal. 

Alternative Pathways to Spain Golden Visa: Non-Real Estate Investments  

With the Golden Visa’s real estate route likely on the way out, there are still ways to secure residency in Spain through other investments. Whether you’re looking for an alternative to property or want to understand the journey to citizenship, it’s important to know your options. Here’s a quick look at what still works for investors. 

Current Investment Options under the Golden Visa 

Even though real estate might be off the table, there are still other investment routes to qualify for Spain’s Golden Visa. These options can help you get your foot in the door. Here’s what you can consider: 

• Capital Investments: Invest €1 million or more in Spanish businesses or stocks. This helps fuel Spain’s economy while securing residency. 

• Government Bonds: Invest €2 million in Spanish government bonds, supporting national projects and earning residency in return. 

• Business Projects: Start a business or invest in one that creates jobs for locals. A €1 million investment can help you contribute to Spain’s economy. 

How Golden Visa of Spain Leads To Residency Pathway

Once you qualify for the Golden Visa, you’re on your way to becoming a Spanish resident—and potentially a citizen. Here’s the step-by-step process: 

1. Golden Visa Approval: Once you make an eligible investment, you’ll receive residency for two years, which you can renew. 

2. Minimum Residency: To maintain your visa, you must live in Spain for at least 183 days a year. 

3. Permanent Residency: After five years of holding the Golden Visa, you can apply for permanent residency, as long as you meet all the requirements like proving stable income. 

4. Citizenship: After ten years of residency, you can apply for Spanish citizenship, gaining all the rights of a Spanish citizen. 

Where to Buy Property in Spain: Best Alternatives to Barcelona for Investors

While Barcelona is often the first city that comes to mind for real estate investments, Spain has many other cities offering great opportunities. From the sunny shores of Alicante to the historic charm of Seville, each city has its own unique appeal for investors.  

Let’s explore a few top destinations and what they have to offer in terms of real estate. 

Valencia 

Valencia is becoming a top choice for both short-term and long-term rentals. With a mix of historic charm and modern amenities, it’s drawing more international investors. The city offers a lower cost of living compared to Barcelona, making it attractive for those seeking a balance of affordability and growth potential. 

Madrid

As Spain’s capital, Madrid is always a strong contender for property investment. The city offers high demand for both residential and commercial properties, with a stable rental market. The real estate trends here are steady, making it a safe bet for long-term investments. 

Alicante

Alicante, located on the Mediterranean coast, is famous for its sunny climate and beach tourism. This city offers great opportunities for short-term rentals, particularly during the peak summer season. It’s becoming increasingly popular with foreign buyers looking for a holiday home or rental property.

Seville

Seville, with its rich history and vibrant culture, is a prime location for real estate. Its growing tourism industry has led to an increase in short-term rental demand. While still more affordable than Madrid and Barcelona, Seville’s market has strong long-term growth potential. 

Malaga

Malaga, often seen as a gateway to the Costa del Sol, offers a mix of beachside luxury and cultural richness. The market here is booming, with high demand for vacation homes and short-term rental properties. It’s also becoming increasingly popular with retirees and expats. 

Comparison of Property Prices and Rental Yields Across Spanish Cities 

Here is the price comparison table according to data acquired in 2023: 

Here’s a look at the current rental rates as of December 2023: 

Valencia Real Estate Market: Spotlight on a Rising Star

Let’s start from the simple question: why Valencia? The truth is Valencia’s mix of affordable property prices, sunny Mediterranean lifestyle, and a booming rental market is making it a top choice for expats and investors alike. 

Top Investment Neighborhoods in Valencia for Investors

Valencia’s diverse neighborhoods offer something unique for every investor. Here’s a quick look at some promising areas: 

• Ciutat Vella: Valencia’s historic heart, where charming, old-world architecture meets the steady demand for short-term rentals. 

• El Cabanyal: A beachside neighborhood with colorful homes and a growing appeal among tourists looking for coastal charm. 

• Ruzafa: A trendy district with a bustling nightlife, arts scene, and high rental demand among young professionals. 

Rental Rates in Key Valencia Neighborhoods 

Below are the key highlights of rental rates in the neighborhoods listed above:  

Special Considerations for Latin American and Filipino Investors

Spain’s property market offers unique advantages for certain foreign investors, especially those from Latin America and the Philippines. While Spain’s Golden Visa changes and property regulations are relevant for all, investors from these regions can also benefit from Spain's tailored residency and citizenship pathways, offering quicker access to EU benefits and a fast-track to Spanish citizenship. 

Naturalization Advantage

For investors from Ibero-American countries, the Philippines, and other specified territories, Spain offers a distinct advantage: a two-year residency pathway to Spanish citizenship. Unlike the typical ten-year requirement, eligible individuals from these regions can become naturalized citizens with just two years of residency. This opens doors not only to Spain but also to the broader EU, making Spain an especially appealing option for those looking to establish a lasting presence in Europe. 

Investors with Sephardic Jewish heritage also have specific options to pursue Spanish residency and citizenship, with Spain recognizing historical ties through a simplified process. For those who qualify, the pathway offers a way to reconnect with cultural roots while gaining the benefits of Spanish residency. 

Why Spain Still Holds Great Potential: The Highly Qualified Activity Visa 

For investors and professionals who see Spain as an appealing place to live and work, this startup visa remains an excellent option. This visa is designed to attract highly skilled talent from around the world, enabling professionals to work and reside in Spain through several distinct pathways.  
 
Here’s a closer look at how this visa might fit into your plans if you have specific qualifications or are part of a high-impact company. 

Overview of the Highly Qualified Activity Visa

The HQA visa offers flexibility, allowing qualified individuals to: 

• Work in Spain as a highly qualified professional. 

• Hold a senior management role that meets the professional standards Spain requires. 

• Qualify if you’re a graduate or post-graduate from a prestigious university or business school. 

Types of Companies Eligible for the Highly Qualified Activity Visa

Not all companies are eligible for this startup visa, but if you’re associated with one of the following, you may qualify: 

• Large companies and strategic SMEs with a significant role in the Spanish economy. 

• Companies that are part of large corporate groups, adding stability and credibility. 

• Companies engaged in strategic projects that align with Spain's economic interests. 

Spain’s startup visa offers a valuable pathway for skilled professionals and investors who see long-term opportunities in Spain’s market. For those meeting the criteria, this visa could be the ideal way to make Spain home. 

Need Help?

If you're considering making an investment in Spain or exploring cities beyond Barcelona, The Millionaire Migrant is here to help you every step of the way. Our team can offer personalized guidance, tailored investment strategies, and expert advice on navigating Spain’s evolving property market. 

Connect with us for more insights on global tax strategies, investment opportunities, and how to make the most of Spain’s unique residency options.