M A I N   N E W S

Special to the tribune
Now, buy a home in Spain and get residency permit
Shyam Bhatia in London

Better off Indians who want the freedom to travel the world without endless worries about visas could do worse than investing in an average Spanish property. Those who are prepared to spend just over Rs 1 crore (£130,000), less than 1/20th of the price of a house in a posh Delhi locality like Defence Colony, will be assured of instant and continuous access to the bright lights of Madrid, not to mention the delights of Harrods in London, Gucci and Prada in Rome and even the Folies Bergere in Paris.

The £130,000 is the price of an average Spanish home. Buying one now comes with the promise of a residency permit that allows purchasers to freely roam throughout the European Union, albeit without the right to work.

To be fair, the Spanish are not the only country to have thought up the idea of offering residency to property investors. Portugal offers the same deal for £327,000 and Ireland for £410,000. Hungary recently offered permanent residence to non EU nationals if they purchased a special issue bond for £201,000.

But the Spanish offer is easily the most generous, reflecting both the dire state of the economy and the huge amount of stagnating housing stock, estimated at between 700,000 and 1.1 million unsold new homes, some of them projected as holiday homes in coastal areas.

Unfortunately for the Spanish authorities both local and foreign buyers are currently keeping their distance from property following the double dip recession that has hit so many countries in the West.

In Spain, where unemployment is running at more than 25 per cent, an estimated 400,000 homes have been repossessed after owners failed to meet mortgage repayments. Spanish banks are reeling after recently revealed figures showed that bad debts made up from loans to home buyers and property developers had hit the frightening sum of 182 billion Euros.

Spain’s secretary of State for Trade Jaime Garcia-Legez explained the new policy late last year, saying, “We have proposed to the other ministries that residents who acquire a home in Spain for more than 160,000 Euros (£130,000) that will automatically entail a residency permit.

“It’s a balanced figure. Any lower and it might create a massive demand for residence permits with housing as the excuse to get them.”

Earlier he explained, “In coming weeks we will start to reform the law regarding foreigners to reactivate demand abroad and contribute toward reducing housing stock.”

The scheme is currently targeted at the Chinese and Russian markets where there is a history of demand for Spanish properties. But Spanish officials have told The Tribune that Indian investors are just as welcome.

One legal expert in West Asia commented, “Residency to Spain means access to Europe. It means free movement in Europe and free trade with other European countries. Spanish passport holders can visit up to 165 countries in the world without a visa, which makes the Spanish passport the 5th most advantageous in the world.”

The only hint of criticism has so far come from Spain’s second largest union, which commented: “It wants to attract foreigners who are obviously rich and able to buy and can supposedly remain in Spain without working with the aim of getting rid of a stock of houses that are largely in the hands of banks.”