Revised Spanish Golden Visa Programme, Contact details for Mr Martin Hayes below.
In this article Martin Hayes of SWAN Partners Explains the Fresh Changes made to improve the Spanish Golden Visa Programme.
The 28th of September 2013 was a date that was greatly anticipated by international investors and the Spanish property sector alike. This was the date that the Spanish Golden Visa programme came into being. Although the programme was much welcomed as a positive measure to aid international movability while providing a potent stimulus to the property sector, it soon became apparent that changes were needed to be made to increase its uptake.
Careful analysis was undertaken by the Spanish authorities since September 2013 as reflected in such documents as the April 2015 the Report on the Implementation of the International Mobility Section of the Entrepreneurial Support and Internationalisation Act of 27 September 2013. Finally, the much needed reforms to the Spanish Golden Visa were brought into being this summer. This article highlights the main features of the visa itself in relation to high value Spanish property investments and the most important changes that have been adapted.
Process Stream Lined & Clear Rights for Holders of Golden Visas
As before, the visa seeks to enable non-European high flyers better mobility while driving forward the Spanish economy. The process has been stream lined and has been made more agile. It is clear that the process has been brought into line with the Spanish property process. The improvements made mean that the process now fits better into the key phases of the typical transaction and the time frames involved. Critically, the Golden Visa process can be initiated much earlier on in the process then previously.
In addition to addressing administrative issues, the Spanish Golden Visa is now even more attractive than before as it rewards the investor with greater rights. For example, now the holder of a golden visa can work in Spain and take part in economic activities. The importance of this change cannot be overstated. Whilst beforehand the benefits of the golden visa could extend to the spouse and children of the holder of the golden visa now it can extend to economically dependent parents of the holder of the golden visa. They too will enjoy the right to reside and work in the Kingdom of Spain.
Real efforts have been made to fast track the system. Now, the process can get underway when the private contract to purchase or Arras Contract is signed. This is a very positive change as it allows investors to have a preliminary visa for “inversion temporal” which will be valid for six months. If the investor is getting effective legal assistance, a typical mortgage free transition can be done and dusted within six to eight weeks or less. A six month temporary visa should provide more than enough time to complete the purchase process.
Another key change has been made in relation to when the application for the Spanish Golden visa itself can be presented. Beforehand, the application for the Spanish Golden Visa could only be commenced once the applicant could provide proof not only that he or she actually completed the purchase of a property for at least €500,000 but that it was actually registered in the property registry in his or her name. This registration process takes place after the completion of the Spanish property purchase at the notary’s office. From the moment the escritura (Spanish Title Deed) is signed the investor is the legal owner. However, it can take anything from four to ten weeks to complete the registration of the transfer of title thereafter. Under the new changes, the application for the Spanish Golden Visa can be presented once the purchase is completed at the notary office and the deeds are presented for registration. Moreover, once the criteria is fulfilled, a one year visa can be put in place to cover the period in which the golden visa becomes effective. This is possible where you have a representative in Spain presenting the application on your behalf. Martin Hayes is on hand should you need assistance in this regard.
No Need to Become a Tax Resident of Spain
A common question that comes up when advising on Spanish Golden Visas is on the consequences that the application may have on the fiscal management of the high net worth individual’s international asset portfolio and or on the treatment of their income tax.
The positive answer to the above question is that there is no requirement for the holder of a Spanish Golden Visa to actually reside in Spain. This means that there is no need to become a fiscal resident in Spain. The net consequence of this is that the holder of a golden visa can take decisions on fiscal residency independently of the Golden Visa. Specialist tax advice geared towards international High Net-worth Individuals and business owners can be accessed through SWAN Partners which regularly assists with such questions.
In keeping with the objective of allowing the holder of a golden visa greater mobility, there is no minimum stay requirement. The holder should visit Spain once a year to renew the visa. Legal advice should be taken as to the steps to be followed in order to obtain permanent residence that can be granted after five years if the correct process is followed.
As before, once the Golden Visa issues the holder and his family will no longer require a specific visa to enter into the Schengen area. Great freedom of mobility can be enjoyed as they can then can transit and enjoy free movement within the Schengen area for a maximum period of 90 days per every six month period.
Key Conditions and Requirements for a Spanish Golden Visa
As always, the applicant must have entered and remained in the territory of Spain legally and be older than 18 years of age. As with any visa or residency application, it is critical that the applicant has observed and complied with the terms of previous access and residency visas. For example, they must not have overstayed beyond the permitted period allowed. Importantly they must not be disqualified any Schengen country. They must also provide a clean criminal record from each county in which they have they have resided in the previous five years.
A key question that must be satisfied is that the person will not be a burden on the Spanish system; they must have public or private health insurance which is applicable in Spain. Furthermore, the applicant must be able to show that he or she has sufficient economic means to sustain themselves and their family. As a rule of thumb this and strictly as a guide this translates to being able to prove income of approximately €2,130 plus €532 per dependent per month so as to properly cover living expenses. This is absolutely independent of the property investment requirement. The above represents the primary requirements, specific legal advice should be obtained if the reader wishes to apply for a Gold visa.
What Type of Spanish Property is covered by the Golden Visa?
A feature that is proving to be most attractive to international investors is that the €500,000 investment can be made into several properties. This allows the investor the option of buying residential, commercial and investment properties. Holders of golden visas can enjoy their principal home and also have an income from, for example villas, apartments and office space once as long as they keep their minimum investment in Spanish property to €500,000. This means that they can enjoy the freedom to spread their investment across secure and low risk properties to speculating on possible future returns on investment such as rural land with development potential, buildings that may attract future urban development opportunities, or areas that may prove attractive for future industrial or tourism related activities.
The minimum investment of €500,000 must be free from mortgages and does not include taxes and fees paid in order to complete the transaction. Another key point is that the holder of the Golden Visa can buy and sell his or her property as and when he or she feels fit. The only requirement is that they maintain the minimum value of €500,000.
Once the golden visa has been granted it’s valid for two years and is renewable for successive periods of five years once conditions are continuously fulfilled. It is strongly recommended that legal advice is taken as to the steps to be followed in order to convert Gold Visa to permanent residency.
It is important to note that as the original law came into effect on 28th of September 2013, investments made prior to this date cannot be used for the purposes of this law. The measure does not have retrospective effect on investments made prior to this date.
While Spain is making a strong economic recovery, the fact remains that property remains undervalued. This fact along with the new reforms to the Spanish Golden Visa combine to offer the international investor with a real and now accessible opportunity. Please contact Martin Hayes of SWAN Partners for assistance or further information.
For further useful information on the legalities of purchasing Spanish property visit www.martinahayes.es
© Martin James Hayes 2015
Contact Found Valencia (www.foundvalencia.com) for information on the purchasing process in Valencia.