- The context for implementing changes to the Greek ‘Golden Visa Program’
- Comments of relevant departments and insider information about the increase in the price of residency by investment in Greece
- Are the changes an attempt to earn political points before the general election?
- Will the Greek ‘Golden Visa Program’ lose its competitive advantage?
- The positive situation in the real estate market as an additional reason to invest in a ‘Golden Visa’ before 2023
- Expert assistance with investment immigration to Greece
Migrant investors planning to obtain a Greece ‘Golden Visa’ (residence permit by investment in real estate) at the old price are advised to apply before 2023. Otherwise, you will probably have to invest two times the current threshold of EUR 250 thousand. The implementation of innovations is expected to begin as early as 2023. However, price increases are not planned in all parts of the country, at least according to information from insiders.
The context for implementing changes to the Greek ‘Golden Visa Program’
At the beginning of September 2022, Greek Prime Minister Kyriakos Mitsotakis made a surprise announcement regarding the local investment migration program. The head of government announced plans to double the minimum investment required to obtain a Greek ‘Golden Visa’ through the purchase of real estate.
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Having mentioned the proposed changes briefly as part of a broader speech about political plans, the prime minister provided very few details.
Comments of relevant departments and insider information about the increase in the price of residency by investment in Greece
Toward the end of September, Greek-based investment migration industry stakeholders with direct access to government sources learned the details of the government’s plans. In particular, the following is reported:
- Firstly, the increase in the minimum investment in real estate from EUR 250,000 to EUR 500,000 will affect only the municipalities of Athens and Thessaloniki, and several prestigious suburbs near Athens. Rumors indicate that the increase in the investment threshold will apply to some islands as well.
- Secondly, the changes will occur not earlier than January 1, 2023, and possibly later. Representatives of the Ministry of Development have indicated their desire to make changes on January 1, 2023, but the Ministry of Immigration has stated its intention to lobby for a longer transition period. According to experts, such disagreements mean introducing new rules no earlier than March/April 2023. The latest rumors from the Department of Immigration also point to the plans for a sort of adjustment period. The duration of such a period is not yet known, but experts say about a half-year starting from January 2023. Independent analysts agree that the introduction of innovations is likely to occur a few months after the onset of 2023 and definitely not in January.
- Thirdly, officials confirmed that investors who buy real estate before the effective date of the changes would be eligible to apply for a residence permit under the old investment threshold. The news is expected to lead to an increase in the number of applications for a Greek ‘Golden Visa’ by investment in real estate in the near future. The number of interested investors who want to take advantage of this opportunity and obtain residence permit without overpayments may increase dramatically.
Experts emphasize that final changes to the Greek ‘Golden Visa Program’ have not yet been approved. At this stage, the timing of the implementation of innovations and geographical restrictions can change in one or another direction.
Another critical question that remains unanswered concerns the possibility of a ban on acquiring two or more properties. In short, a ‘Golden Visa’ applicant may have to spend EUR 500,000 to buy a single property. Otherwise, applicants will have the opportunity to purchase five apartments for EUR 100,000 each (for example, one for their own residence and the rest for rent).
Are the changes an attempt to earn political points before the general election?
Briefly announcing the planned increase in the price of a ‘Golden Visa’ by investment in real estate during a speech in Thessaloniki in early September, Prime Minister Mitsotakis indicated that the innovations are designed to make it easier for ordinary Greek families to solve the housing issue.
In other words, the Greek authorities have made an attempt to increase the range of financially available real estate, the purchase of which interested Greeks can afford. Interestingly, Mitsotakis announced this move ahead of the next general election (including Greek legislative elections), which is expected to occur before July 2023.
Therefore, it is likely that raising the investment threshold for applying for a Greek residence permit through the purchase of real estate is nothing more than an attempt to enlist the electorate’s support and earn political points before the next elections.
The experts we interviewed provided additional context regarding the justification for the government’s actions. Analysts reasonably point out that many non-EU real estate investors bought a property in the Athens area to participate in the Greek investment migration program and obtain a ‘Golden Visa’. Affordable housing was offered in this area a few years ago. The new owners repaired the acquired property and resold it for double the price. Probably, the authorities decided to fight such semi-speculative transactions.
Regardless of the circumstances, the Prime Minister’s sudden announcement came as a surprise and shock to both the real estate market stakeholders, many of which have made ‘Golden Visa’ applicants part of their target audience, and local companies from the investment migration sector.
Will the Greek ‘Golden Visa Program’ lose its competitive advantage?
There is outrage among a number of local migration agents because, according to experts, an increase in the price of a Greek ‘Golden Visa’ will negatively affect the competitiveness of Greece as a destination for investment migration.
Nowadays, this country offers the most financially affordable investment migration program in the European Union if we compare programs that allow obtaining a residence permit through purchasing real estate.
Yes, obtaining a ‘Golden Visa’ in Portugal is possible when buying a property for EUR 280,000, which is not much more than the current investment threshold for obtaining a residence permit in Greece. But in Portugal, the buyer receives an asset with low liquidity since it is required to buy a property over 30 years old located in a rural area.
If you want to buy a really liquid asset for obtaining a residence permit, you will have to pay already EUR 500,000. In neighboring Spain, the investment threshold for obtaining a residence permit through the purchase of real estate is also set at EUR 500,000.
In addition, it should be noted that the product offered by Portugal even now successfully competes with the Greek ‘Golden Visa Program’. After obtaining a residence permit in Portugal by investment in real estate, the investor has the opportunity to get citizenship in this EU member state on simplified terms.
It is sufficient to reside in Portuguese territory for one week annually within a five-year period from the date of obtaining a residence permit and then pass the Portuguese language test. In Greece, naturalization requires seven years of residency with a stay in the host country for most of each year.
It would be best if you also kept in mind the proposals of several candidate states for EU membership. For example, to obtain a residence permit in Serbia by investment in real estate, it is enough to buy any property in the country suitable for living and then actually live in the purchased apartment/cottage for most of the year. Neighboring Montenegro and Albania offer similar conditions.
The positive situation in the real estate market as an additional reason to invest in a ‘Golden Visa’ before 2023
According to industry data, the cost of housing in most European countries continues to grow, albeit at a slower pace than in 2021. This gives hope that the European real estate market is able to weather difficult times amid rising mortgage interest rates and energy costs.
According to the analysis of market data by the Global Property Guide experts, in the second quarter of 2022, the cost of housing increased in 20 of the 28 European markets for which data was available.
But only 7 countries in the second quarter of 2022 showed more impressive dynamics compared to the 2nd quarter of 2021. Greece is one of these countries. The latest data from the Greek Central Bank shows that the cost of local housing increased by 9.4% in April-June 2022 on an annualized basis (compared to a growth of 6.9% in the same quarter of 2021).
In fairness, it should be noted that the situation is not so rosy if we consider the data adjusted for inflation. Adjusted for core inflation, which does not consider changes in the cost of energy and food, the real price growth in the Greek residential real estate market in the second quarter of 2022 reached 6.7% (against 8.1% in the second quarter of 2021).
However, the Greek real estate market appears to have a high potential for further value developments as price drivers outweigh the negatives in quantity and quality.
|Factors negatively affecting prices||Positive factors|
|Energy crisis. News of rising energy prices is preparing Greek households for a tough winter. And given the low level of energy efficiency of most residential buildings in Greece, this is forcing many potential buyers to put off investing.|
Inflation and expensive loans. The ongoing inflationary spiral and high fluctuations in interest rates on loans (mortgage, debt financing of the construction business) are expected to cause a slowdown in property sales, especially expensive real estate, as the overall cost of living continues to rise and the purchasing power of the population to fall.
|Tourism recovery. Against a rapid recovery in demand for tourism services, a significant part of potential buyers decides to invest in property in Greece for daily rent. In particular, according to the data of the Greek Central Bank, in July 2022, an absolute historical record was set in terms of tourist spending in this month. Guests of local resorts spent EUR 3.723 billion, up 0.56% compared to July 2019, when the previous record was set. That figure is impressive considering how badly the Greek economy was hit during the two-year global health crisis.|
Shortage of new buildings. Construction activity, which dwindled after a torpor caused by material price explosions last spring, is rebounding slowly, even in high-demand hotspots. This circumstance leads to the formation of a shortage of new buildings and upward pressure on prices in the corresponding segment.
Greek ‘Golden Visa’ price increase. The news about doubling the investment threshold for obtaining a Greece residence permit by real estate purchase will definitely lead to an increase in the activity of foreign investors. It will generate additional demand for Greek real estate and, accordingly, put upward pressure on prices.
Experts agree that in the short term, the negative factors listed above will not significantly impact the cost of residential real estate in Greece since now demand far exceeds supply, and consumers react to the negative with a lag.
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How much does a Greek residence permit by investment in real estate cost?
The entry threshold is EUR 250 thousand, but in September 2022, the Greek authorities announced a twofold increase in the investment threshold. Specific dates for the implementation of innovations have not yet been announced. The applicant will additionally have to pay for the services of a notary, lawyers, realtors, and administrative fees associated with the registration of ownership of the acquired property.
What advantages does a Greek ‘Golden Visa’ give?
Greek residence permit provides for the removal of visa restrictions when traveling through the territory of the Schengen countries, tax benefits (a special program is available for new fiscal residents), simplification of interaction with bankers around the world, the right to have an emergency hatch in a European resort state, and access to the EU citizenship after seven years of naturalization.