The measure targets the Chinese and Russian markets, where there is a lot of interest in buying properties in Spain, Jaime García-Legaz, secretary of state for commerce, said according to Spanish media.
“In a week we will start a reform of the foreigners’ legislation to offer residence permits to foreigners who buy a property in Spain above a certain price,” he was quoted by saying during a conference co-organized with Ernst&Young.
“The objective is to boost foreign demand, which would contribute to reducing the housing stock.”
He said the price limit for the property was likely to be around 160,000 euros ($204,416).
“One cannot put a lower limit than that because it would spark massive demand for residence permits and the property would only become a pretext,” said García-Legaz.
But Spanish Prime Minister Mariano Rajoy said a short time afterwards that no firm decision had been taken on the issue.
Spanish house prices crashed more than 25% since the peak of the market, with houses costing nearly as much as they did back in 2002 in some regions.
Figures released on Monday showed bad loans in Spanish banks reached a new record high of 10.7% of their total portfolio, to 182.2 billion euros in September.
Last month, three members of the Hungarian ruling party proposed legislation offering Hungarian citizenship to foreigners who buy government bonds worth 250,000 euros or more.