Taxes for internationals planning to invest in the central Spanish region will be slashed, the conservative government of Madrid has said.
Such a proposal introduced by Isabel Diaz Ayuso of the People’s Party (PP), aims to present Madrid as a business-friendly bulwark, Schengen.News reports.
Back in 2022, Spain’s leftist coalition government introduced a “solidarity tax on large fortunes”. The tax only targets wealthy foreign nationals while the majority of people are not affected.
The main purpose of this tax is to generate more revenue from taxpayers with a greater economic capacity in order to help the government tackle the energy as well as inflationary crisis, while also helping lower earners deal with the high cost of living.
The new bill will deduct 20 per cent of investment in bonds, treasury bills, and shares in listed as well as unlisted companies among others.
It has been emphasized that the deduction will apply to transactions carried out since January 1 of this year, however, it does not include investments in real estate.
Changes in Golden Visa Program to Deal With Housing Crisis
As part of efforts to better manage the housing crisis, authorities in Spain abolished the real estate investment option from their Golden Visa Program which offers residency to internationals, in exchange for financial investment.
The decision was confirmed by the President of the Government, Pedro Sanchez, vowing that he would take all the needed measures to guarantee that housing is a right and not a “mere speculative business”.
I want to announce that tomorrow’s Council of Ministers is going to study a report submitted by the Minister of Housing and Urban Agenda to modify the law, approved by the Popular Party in 2013, which allows obtaining a residence visa if you invest in housing in our country.
However, a report from Transparency International said that the risks of irregular capital entering the real estate sector remain high, emphasizing that ending the real estate investment option from this scheme is not enough.
In May this year, the Spanish government said that it would ban investment in projects that lead to a surge in housing prices in exchange for residence permits through the Golden Visa Program.
Based on the proposal aiming to reform the law, in exchange for a golden visa, internationals would be eligible to invest in a business project developed in Spain, which is in the interest of the country, however, the investment should not have an inflationary effect on the housing market.
