Spain: Buy a House, Get a Residency Permit

Madrid, Spain
Photo by Felipe Gabaldón

Despite the fact that Spain has had a struggling economy for years, it's still a popular expat destination (particularly for the British). With 25% unemployment and no ability to exercise independent monetary policy,  Spain is struggling to figure out a way out of their current financial crisis. In particular, their housing situation is bad and it's not likely to get better in the forseaable future. Thus, Spain has an ambitious plan to offer residency to foreigners who buy houses in Spain. Spend at least €160,000 (around $200,000 US) on a home, and you'll get a Spanish residency permit.
Historically, Spanish laws surrounding residency and citizenship have targeted the Latin population in Central and South America, but this plan, according to the article, is targeting the Russians and Chinese! Presumably this is because they have many citizens who are both financially solvent and wanting to take up residency in another country.
There are a few things you should be aware of, though. First, it usually takes 10 years of residency before you can apply to be naturalized as a citizen. Second, most foreigners are not allowed to retain their original citizenship unless they can prove Spanish descent or hail from certain Latin American countries. Third, there could well be a political problem here. On one hand, maybe the Spanish people would be grateful if a bunch of foreigners rushed in to buy their land and help the economy. On the other hand, maybe world peace will spontaneously break out tomorrow.
All things considered, it could be a great investment ... in the long run. In the short run, you'd want to think this one through very carefully. Spain's beautiful, but I think I'd give this opportunity a miss unless I really understood what I was getting into.