08 Aug The hidden opportunity of Golden Visa
The hidden opportunity of Golden Visa
Greek residence permits are among the cheapest in Europe!
Why Investors Should Not Ignore Greece’s Golden Visa Program
There are several ways to gain residence in the European Union (EU), including obtaining a wealth visa, which obliges applicants to change their tax residency, open a business, or marrying a EU national. These strategies work for those who plan on moving abroad. However, many people want to obtain residency for other purposes, such as to facilitate interaction with foreign banks, travel freely across the EU, or as a safety precaution in case of an urgent need to emigrate (this being one of the major motives among Turkish, Iranian, Russian, and Chinese nationals).
A good option in such cases is the so-called “Golden Visa,” which is a residence permit issued to buyers of real estate or other assets above a certain value. This is the easiest and quickest way to obtain a residence permit. The most accessible immigration programs in the EU are those offered by Latvia, Portugal, Spain, Greece, and Malta.
Latvia, the leader in the number of residence permits issued, was extremely popular with investors until, in 2014, the country’s parliament voted to increase the investment threshold. Spain and Portugal have always been popular among affluent immigrants, while Malta, which introduced its own Golden Visa program in August 2015, is now beginning to grow in popularity but it is more expensive so far in comparison with the other countries.
However, Greece’s economy is starting to look much better — unemployment has been decreasing since 2013, and, according to the International Monetary Fund (IMF), the country’s GDP grew by 2.8% in 2018. Greece offers the most beneficial terms for investors for a number of reasons and is one of the most preferable options for investors to gain their Golden Visa.
1. Low Investment Threshold
Greece offers the cheapest residence for investment. Applicants must buy one or several properties totalling at least €250,000. The same amount is specified in the Latvian program, but, under its conditions, investors must pay a 5% non-refundable fee, which increases the investment threshold to €262,500.
In Malta, a mandatory condition, along with buying (from €270,000 or €320,000 depending on the location) or leasing (from €50,000 or €60,000 in 5 years) a property, is to invest €250,000 in public bonds and pay a €30,000 fee. Therefore, the minimum investment amount is €330,000.
A residence permit in Portugal can be obtained by purchasing a property worth €350,000, if built over 30 years ago or located in areas of urban regeneration, or €400,000, if situated in low population density areas. More liquid properties must cost at least €500,000. Spain offers the same starting price in its program.
2. Opportunity to Buy Several Properties or Participate in a Large Project
The programs of Greece, Spain, and Portugal allow the purchase of several properties to meet the minimum investment threshold. Latvia allows this only in small cities, with the exception of the popular Riga and Jūrmala, while Malta only allows investing in one property. The Greek and Portuguese programs also allow collective investments, provided that the applicants’ investments are not less than the established threshold values.
3. Low Prices and Growth Potential
The price of real estate in the centers of large Greek cities, which average €1,300 per square meter, is the lowest among the five countries — almost twice as cheap than Spain and Malta, and 1.5 times cheaper than in Portugal.
The price difference between Greece and Latvia is not so significant (about 10%), but the price growth potential is higher in Greece. According to official data, real estate in Greece is 44% cheaper compared to its 2008 peak, while in Latvia it is 27% cheaper. It should be noted that since the global financial crisis, property prices in Latvia have already experienced volatility (associated with the activity of Russian buyers). Property prices in Spain are approaching peak levels, while prices in Portugal and Malta have already exceeded pre-crisis figures by 2% and 10% respectively.
4. Rental Income
Golden Visa holders often do not need the purchased real estate and, instead, lease it to compensate for the investment. In Greece, Latvia, Spain, and Portugal, investors are free to do so, while Malta prohibits the lease of such properties during the first 5 years of ownership. In this case, the most lucrative scenario for owners of property in touristy locations would be to rent out their properties for short-term contracts, as this type of lease returns higher yields compared to long-term rentals.
According to World Tourism Organization (UNWTO) statistics, Greece outnumbers Portugal twice and Latvia by 10 times in terms of international tourist arrivals. International tourists visit Spain approximately three times more often, but thanks to a difference in prices per square meter, Greece yields a higher investment profit: about 5% after tax and management company expenses. While rental rates for flats in Athens oscillate between €50 and €70 per night, and between €70 and €90 in Barcelona or Lisbon, real estate prices in these cities differ by almost three times: the average price per square meter is €1,265 in the center of Athens, €3,317 in Lisbon, and €4,399 in Barcelona.
Therefore, the most reasonable choice for investors wishing to obtain a Golden Visa would be to buy tourist apartments in central Athens for short-term leases. This allows investors to obtain the visa and secure a “safe haven” asset, but also a potential income of 5% in foreign currency.
Key Features of the Greek Golden Visa
- Includes dependent children up to age 24 (initially the age of a child shouldn’t exceed 21, then s/he can extend till the 24th year of age)
- Includes the parents of both spouses
- 3 month processing time (in some areas it takes less time, i.e. Chania, Crete in 10 days)
- Gives the right to apply for EU citizenship
- Visa-free travel within Schengen zone
Greek Citizenship By Investment
Permanent residents have the right to apply for Greek citizenship after living in Greece for 7 years, in accordance with legal provisions. Their children may apply if:
- they attend any school in Greece for 9 years, or
- they attend a secondary school in Greece for 6 years, or
- they attend a University in Greece.