The plan was revealed earlier this week by Spain’s Minister of Trade, Jaime Garcia-Legaz , who said it would target Russian and Chinese property buyers in particular.
Russians are already said to be present in growing numbers in the Costa del Sol and Costa Brava.
The scheme, if enacted, is thought likely to appeal to other foreign nationals as well who are keen to obtain a European passport.
Paul Barnett, a director at Totus, the advisory group which specialises in looking after exptriates in several Spanish markets, said the scheme could prove to be such an attraction that the government eventually might have to raise the minimum amount.
"This will potentially bring new investment and new clients to Spain, and help the ailing economy," he added.
If this scheme is implemented, we expect to help a fair number of people to take advantage of it, and at the same time make sure that they don’t fall foul of Spain’s newly-tightened rules on offshore assets, which must be declared in their entirety to avoid potentially ruinous fines."
Spain ‘in competition’ with Cyprus
News of Spain’s scheme to attract wealthy foreign homebuyers was viewed with some interest in Cyprus, according to the Cyprus Property News, which reported today that it would put Spain "in competition" with Cyprus.
This is because Cyprus has a similar residency scheme for third country nationals to that proposed for Spain, which also targets wealthy investors from Russia and China, "but the minimum investment in property has been set at €300,000, almost double" the Spanish scheme’s amount, the CPN noted.
Ireland and Portugal also offer residency to foreigners who buy properties – in these cases, worth more than €400,000 and €500,000, respectively.
All four countries’ economies have been hard-hit by the 2008 financial crisis, which caused their inflated property markets to collapse and left their banks holding mortgages and deeds on real estate worth only a fraction of what it had been before the downturn. Spain’s stockpile of unwanted property is said to number around 750,000 homes.