Spain’s Golden Visa program, which has allowed non-EU investors to obtain residency through property purchases of €500,000 or more, is set to end in 2025. This significant change in Spanish immigration policy has implications for international property buyers, but it does not diminish the appeal of investing in Spanish real estate—particularly in the stunning island of Tenerife.
What is the Golden Visa and Why is it Ending?
The Golden Visa program was introduced in Spain in 2013 as part of the Entrepreneur Support Act (Ley 14/2013). It granted residency permits to non-EU nationals who made significant investments in Spain, including:
- Real estate purchase of €500,000 or more
- Capital investment of €1 million or more in Spanish companies
- Bank deposits of €1 million or more
- Government bond purchases of €2 million or more
The Spanish government announced in April 2024 that it would phase out the Golden Visa program, citing concerns about its impact on housing affordability and social inequality.
What Does This Mean for Property Buyers?
While the end of the Golden Visa removes one pathway to Spanish residency, it is important to note:
- Property purchase rights remain unchanged: Foreign nationals can still buy property in Spain without any restrictions.
- Alternative residency options exist: Non-lucrative visas, work permits, digital nomad visas, and other pathways to Spanish residency remain available.
- Investment fundamentals remain strong: The reasons for investing in Spanish property—rental yields, capital appreciation, lifestyle—have not changed.
- Tenerife’s appeal is independent of visa programs: The island’s attractiveness as a property investment destination is based on its climate, tax benefits, and quality of life.
Key Tips for Buying Property in Tenerife
1. Act Quickly but Wisely
The current market offers excellent opportunities:
- Luxury properties in prime locations are still available at competitive prices
- Sellers may be more willing to negotiate
- The market is expected to continue growing due to genuine demand
2. Focus on Prime Locations
Invest in areas with proven demand and growth potential:
- Costa Adeje: The premier luxury destination in Tenerife
- Abama: Exclusive resort community with 5-star amenities
- Golf Costa Adeje: Properties near the championship golf course
- Los Cristianos: Popular tourist area with strong rental demand
- Playa San Juan: Up-and-coming area with excellent value
3. Consider the Tax Advantages
Tenerife’s special tax regime continues to offer significant benefits:
- Lower indirect tax (IGIC at 7%) compared to mainland Spain
- ZEC regime offering 4% corporate tax for qualifying companies
- RIC tax incentives for reinvestment
- No inheritance tax between direct family members in the Canary Islands (with exemptions up to certain thresholds)
4. Explore Alternative Residency Options
If residency in Spain is important to you, consider these alternatives:
- Non-Lucrative Visa: For those with sufficient financial means who do not plan to work in Spain
- Digital Nomad Visa: For remote workers employed by companies outside Spain
- Self-Employment Visa: For entrepreneurs and freelancers
- EU Family Member: If you have EU family connections
5. Work with Local Experts
Navigating the Tenerife property market requires local knowledge:
- Choose a real estate agency with deep expertise in the Tenerife luxury market
- Hire an independent lawyer familiar with Canary Islands property law
- Use a qualified surveyor to assess property condition
- Engage a tax advisor who understands both Spanish and Canary Islands tax regimes
The Future of Tenerife Real Estate
Despite the end of the Golden Visa, the outlook for Tenerife real estate remains positive:
- Tourism growth continues, with record visitor numbers
- Infrastructure improvements enhance connectivity
- Remote work trends increase demand for lifestyle properties
- Limited land supply supports property values
- The Canary Islands’ special economic zone status attracts businesses and entrepreneurs
Conclusion
While the end of Spain’s Golden Visa program marks a significant policy change, it does not diminish the fundamental appeal of investing in Tenerife property. The island’s unique combination of climate, tax benefits, lifestyle, and investment potential continues to make it one of the most attractive destinations for international property buyers.
At GS Luxury Spain, we help investors navigate the evolving landscape of Spanish property investment. Whether you are looking for a luxury villa, a holiday apartment, or a strategic investment property in Tenerife, our team is here to guide you every step of the way.
