Spain property market wooing Chinese and Russian buyers with residency offer

Spanish property has been attracting wealthy Chinese and Russian buyers

Non-EU investors who buy a property in Spain worth more than €160,000 will be given automatic residency permits in a bid by the authorities to ease the country’s oversupply of housing.

Spain’s secretary of trade announced the plan last week, stating that such a move was necessary in order to attract wealthy Russian and Chinese buyers to the market.

“In coming weeks, we will start to reform law regarding foreigners to reactive demand abroad and contribute toward reducing housing stock,” said Jaime Garcia-Legaz at a conference in Madrid.

As Spanish residents, buyers would be free to take advantage of the 25-nation Schengen zone – an agreement between European countries that permits residents of its members to travel freely in any of the other member nations.

Some EU member states have expressed concerns that this move could lead to some residents seeking a Spanish passport, which would give them the right to live and work freely within the EU.

The full details have yet to be revealed, but ministers assured sceptics that residency would not lead to a Spanish passport, stressing that it was merely an incentive to tempt buyers primarily from non-EU countries.

The move follows similar initiatives in Ireland, Portugal and Hungary – although no country has set the benchmark as low as €160,000.

“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,” warned Garcia-Legaz.

Demand for Spanish properties has surged in China and Russia, where buyers now make up four and eight per cent of the foreign property market respectively, up from just one per cent between them in 2007.  Britons, meanwhile, account for 13 per cent of all Spanish property sales to non-Spaniards.