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Legal residency in Europe: two attractive opportunities

If you reside outside of Europe but you would like to obtain the right of abode in this part of the world, it is quite possible to do that. Besides, you can invest into real property there that grows in value over time. According to the Eurostat data, the most lucrative investment options can be found in Portugal and Malta.

These two countries are among those European states that run the so-called ‘golden visa’ programs. A golden visa is in effect a legal residence permit that can be obtained in exchange for investment. You do not have to take any language tests, you do not have to have a university degree, nor are there any age restrictions.

Residence permit for investment in real estate

A golden visa allows travelling all across the Schengen zone, make use of the available tax incentives, engage into business in Europe, attend educational institutions there, and so on. In addition, it can be a path to acquiring full citizenship of a European country with time. You are not bound to hold to the property that you purchase. You can sell it back at any moment but thus you will lose the residence permit. However, if you acquire second citizenship before selling the property, you will not lose anything.

People apply for golden visas for different purposes. If you would like to acquire legal residency in Europe and have a good return on your investment at the same time, the most attractive countries to consider are Portugal and Malta.

Portugal and Malta are the best choice for long-term investors seeking legal residency in Europe

The selling prices of the Portuguese and Maltese residential accommodations as well as the rent prices have grown considerably over the last ten years. Even the Covid-19 pandemic has had little effect on this trend. According to Eurostat, the prices for housing facilities in Portugal and Malta have grown by 40% over this period while the rent prices have increased by 15%. All other European states that have golden visa programs have shown much more modest results.

If we look at the general picture in Europe, we will see that the rent has grown by 14.2% and the housing prices have grown by 25% on average between 2010 and 2020.

Residence permit in Portugal and Malta

The graph shows that there are countries in Europe that have demonstrated a more impressive growth than Portugal and Malta. However, these countries do not offer golden visa opportunities. At the same time, some countries that do have golden visa programs have demonstrated a decline in the prices for housing facilities as well as the rent prices.

Would you like to acquire legal residency in Europe in exchange for investment into real estate? Please take the following factors into consideration

European ‘golden visa’ programs provide for a wonderful opportunity to acquire legal residency on the old continent by purchasing a piece of real property there. However, these programs are not cheap and before investing a large sum of money, you have to think very carefully and make the right choice. The matter is that making investments in a foreign country is usually a riskier enterprise than making investments at home. A foreign investor is more likely to fall prey to fraudsters and he/ she may lack some knowledge about the local ways. Please allow us to give you some advice on purchasing property in Europe with the purpose of obtaining legal residency there.  

1. Use the services of a lawyer

You should not blindly trust the property sellers. After all, they only want your money and they are not concerned if you are making a good investment or a bad one. Thus, you should hire a lawyer by all means as he/ she will check if the deal is perfectly clean. The seller theoretically can conceal some encumbrances or some unpaid taxes or utility bills. The lawyer will charge you one to two percent of the property price for their services but it is worth paying the money. When acquiring legal residency in Europe in exchange for an investment you are spending hundreds of thousands or even millions of euros, so it is better to be safe than sorry when making such a large investment.

2. Use the services of an assessor

Foreign buyers are often charged more than the property is really worth. For this reason, you should apply to a bank or an insurance company for an assessment of the property that you are considering investing into. An independent surveyor will give you an accurate estimate of the real price of the property. This is especially important if you are planning to sell it back at some point in the future: if the property is overpriced when you buy it, you have lesser chances to sell it with a profit when you want to sell it. 

3. Inquire about the official approval

Please bear in mind that some countries granting legal residency or citizenship to foreign investors require that the national Government approve the development project that they are investing in for this purpose.

This requirement does not hold in Portugal nor Malta but there are certain Government regulations anyway. For instance, the required investment amount will vary depending on the region of the country where you are buying property in both cases. Besides, this amount will also vary in Portugal depending on what type of property (old or new) you are buying. So, you will be well advised to consult a specialist who can protect you from some fraudulent actions on the part of the developer/ property seller.

4. Inquire about the taxes

You should acquire exhaustive information about the taxes involved in buying and maintaining real property in the foreign country where you are hoping to obtain legal residency. Find out about the VAT, the property transfer tax, the stamp duty, the capital gains tax, the wealth tax, and so on.

If you are planning to rent the property out when you become its owner, you should also learn about the taxes involved. The rent pay is going to be your income and that is taxable, as you know. Thus, you must find out about the tax rate and other regulations related to letting the property on a lease in the country of your legal residency in Europe. Learn if a special permit from the authorities is required for that.

5. Find out about restrictions for foreign property owners

Please bear in mind that some countries impose certain restrictions when it comes to selling property or land lots to foreign nationals. For instance, there will be strategic military zones where foreigners cannot own anything.

6. Invest into commercial property with care

Both in Portugal and in Malta, you can buy commercial property instead of residential accommodations and this will make you qualified for legal residency too. However, we are in the middle of a global economic crisis and you have to remember that most hotels are empty at the moment and trade centers see much fewer customers as well. Experts claim that the situation is going to be back to normal in a year or two but no-one can be certain that it is true. So please think twice before making an investment into commercial estate when applying for legal residency in a European country.

7. Monitor the prices

Compare the property prices per square meter in different European countries and different regions of the same country. Study the price-quality ratios found in different states. Find out if rental accommodations are in high demand in the country that you are considering or they are not. Do the math, shortly speaking.

Please also bear in mind that due to the pandemic, you can find some very attractive offers at the current moment. It may sound ironic but the time of a global disaster is the best time to invest.

Signs of fraud

  • Avoid dealing with consultants and agencies that give a 100% guarantee that you will obtain legal residency in the country where you are buying property. Each foreign national applying for a golden visa has to undergo due diligence checks. No immigration agency nor realtor has any control over the national immigration authorities. Any candidate for legal residency in any country can be deemed ‘unfit’ by the Government officials. You can never be 100% sure of the success of the enterprise so please do not allow anyone to fool you.
  • If you hear that your investment is going to be perfectly secure or that you are guaranteed to have an income from your property, always take such statements with a pinch of salt. Any investment involves some risk.
  • Be skeptical if you hear that you can always let your property on a lease or that you can resell it at a profit after some time. Supply and demand change and so do price trends. Be realistic.
  • Keep away from unlicensed agencies and individuals offering immigration and investment consulting services.

What you should do to avoid fraudsters

  • Do not buy cheap offers.
  • Trust nobody.
  • Avoid red flags such as super profitability of the investment object.
  • Take caution against fake documents.
  • Use official agencies such as the Land Cadaster, for instance, to verify the information supplied by a realtor or the property owner.
  • Do not overpay.
  • Work only with established reliable agencies.
  • Use professional assistance when applying for legal residency in Europe in exchange for investment.

Professional assistance in acquiring legal residency in Portugal or Malta

Are you thinking of relocating to Western Europe where life is safe and predictable? Are you thinking of upgrading your lifestyle? The experts of InternationalWealth portal will be happy to be of assistance to you! Please apply for a free consultation on acquiring legal residency in Europe. You are welcome to contact us via email, WhatsApp, or live chat. We always reply promptly!

What is an EU golden visa?

A golden visa is a possibility to acquire legal residency in Europe by investment. When you buy property in a European country running the corresponding program, you can apply for a permanent residence permit. Golden visas are very popular with non-Europeans as they provide for a possibility to travel all across the continent and bring many other advantages. Legal residency is granted not only to the investor but to the members of his/ her family as well.

How can I acquire legal residency in Portugal by investment?

In order to qualify for legal residency in Portugal you have to invest minimum 350,000 euros in the real property that is over thirty years old or minimum 500,000 euros if the property is less than thirty years old. The first option presupposes an obligation to invest additionally into repairing the property. The required investment amount is 20% lower if the property is located in a sparsely populated or an economically disadvantaged region of the country.

How can I acquire legal residency in Malta by investment?

In order to qualify for legal residency in Malta you have to invest minimum 320,000 euros into real estate in the country. If you are buying property on the island of Gozo, the required investment amount is 270,000 euros. In addition, you have to invest 250,000 into Maltese Government bonds and make a non-returnable donation of 30,000 euros to the state fund. In Malta, the foreign investor obtains a permanent legal residency permit instantly, without having to go through the temporary residency stage.

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