To combat the housing shortage in Spain, the left-wing central government has decided to end the Golden Visa programme for property investors from non-EU countries.
The aim is to curb speculation, Prime Minister Pedro Sánchez explained in Seville on Monday. "We will take the necessary measures to ensure that housing is a right and not a speculative business."
The Socialist politician said that the Council of Ministers would finalize the necessary amendment to the law on Tuesday in Madrid, but he did not give a possible date for the entry into force.
The Golden Visa programme has allowed citizens from non-EU countries to acquire residency in Spain since 2013 if they buy property worth at least €500,000 ($543,000) in the country. It also applies to financial investments of at least €1 million in companies or €2 million in government bonds.
Similar programmes were also launched in other European Union countries during the euro crisis.
The investor visa in return for the purchase of property is controversial everywhere because it is seen as one of the causes of the price increases on the property market and the housing shortage.
Sánchez said on Monday that 94% of all Golden Visas in Spain are granted for property investments. However, the aim is to achieve "real and sustainable progress."
"We want to be a country for productive investment that creates innovation and high-quality employment," he emphasized.
According to Sánchez, the housing situation is particularly tense in major cities such as Madrid, Barcelona, Málaga and Valencia, as well as on the Balearic Islands, including the holiday island of Mallorca.
Due to the demand from wealthy foreigners, it is almost impossible for locals "who live, work and pay taxes there to find decent accommodation."
According to official figures, Spain has granted more than 5,000 Golden Visas since 2013, with more than 2,000 going to citizens from China.