This blog entry is of special relevance to business persons and people of means who’d like to obtain a European residence permit as quickly and as effortlessly as possible. We will tell you about the grounds for the popularity of Greek residence by investment program, whether or not it is profitable to invest in Greek real estate today, and whether Athens will become Europe’s hottest market.
We’ve also visually compared costs of European investment residence programs.
A quick summary of the article you’re about to read:
According to the official program statistics, just 20 Golden Visa residence permits were issued in its first year, with the number rising to 455 in 2014, 968 in 2015, and 1550 in 2016. By October 2017, around 1,700 permits were issued to foreign investors who contributed over €1.12 billion to the Greek economy. Analysts say this growth tendence will continue.
Though Greek residence does not grant the permit holder the right to employment, it is ideal for those who want to relocate to another highly-developed country, or have a safe location to fall back on in case of unforeseen circumstances.
Business expansion is another major factor. Fitch Ratings agency has raised their credit rating for Greece from CCC to B-, which confirms that starting a business on this part of the Balkan Peninsula is safe and quite promising.
Naturally, handling the increasing load of business matters entails frequent travel. The Greek Golden Visa allows its holders to forget about time and energy spent on visa acquisition with their visa-free access to all the Schengen Area countries.
Living in and travelling to European countries, the investors make themselves more familiar with the popular notion of European quality of life. Residence permit holders are allowed to stay indefinitely in Greece and use all the benefits the European Union has to offer, the main among them a well-developed legal system, and high quality of education and healthcare.
The investor’s family members can enjoy all of the above as well, since the spouse, children under 18 years of age, as well older financially dependent children under 23 years of age, and parents or grandparents may be listed in the application.
By the way, the investor may opt not to relocate to Greece on a permanent basis; unlike Portugal that demands that its foreign investors reside there for at least 14 days per two years, Greece doesn’t have residence requirements. That said, if the investor is keen on obtaining the status of a permanent resident or a citizen, then they must reside in Greece not less than 183 days per year.
The Golden Visa application processing takes just 1 or 2 months. The applicants are expected to come to Greece once, to submit biometrics and receive the resident ID cards.
Two options are particularly popular with respectable businessmen: Golden Visa through real estate purchase, and residence permit for financially independent persons. Golden Visa is still more optimal, since the permit is still issued on the condition of owning/renting real estate. The option with financial independence is less costly; the Golden Visa program, in its turn, makes it possible to invest in one or several residential or commercial real estate projects – new or secondary, or a development project. There are no government-approved lists of preferred objects or locations, and the investor may rent the property out.
The residence permit is renewed given that the investor retains the property; it is, by the way, possible to “swap” the initial object for the one that suits the investor’s needs better (but is of an equal cost).
Additional costs include:
With all of the above, the minimum cost of Greek Golden Visa doesn’t exceed €300,000.
Today, the Greek real estate market has a plenty of objects to choose that cost under €300,000, including in tourist-favoured and resort spots. This makes Greece stand out from, say, the Portuguese or Spanish CBI programs that offer their Golden Visas for €500,000 but in reality, don’t have any decent options under €800,000.
To apply as a financially independent person, one has to have at least €48,000 in bank account, with additional 20% (about €10,000) for spousal support, and 15% (about €7.2k) for children under 18 years of age. The funds may be kept either in a Greek bank, or outside Greece. This type of permit is renewed given that the principal applicant proves their income is sufficient enough to sustain their family without having to seek employment opportunities within Greece. In this case, additional fees include €300 per adult person for ID-card issuance, and health insurance starts at €300 for each family member. A residence permit for financially independent persons requires for a type D visa that denotes intention to immigrate issued by competent Greek authorities based on place of residence in Greece. This means a real estate object is still required to apply and extend the permit.
As we have already noted, Greek Golden Visa investors have at their disposal a wider spectrum of reasonably-priced property that is within the declared minimum price range (€250,000) as compared to Portugal, Spain, or Malta.
Greek real estate is in such high demand because of the crisis price drop of 2012-2013.
As per the Bank of Greece data, real estate prices have fallen by over 42% in the period between 2008 to 2017; in Athens, the Greek capital, prices dropped by 43.8%. With a yearly climb of 0.6%, the prices would reach their 2008 peak in a distant year of 2050.
Having in mind the public policy on reduction in mortgage interest rates – which have halved since 2008 – experts say Greece is on the brink of a roaring real estate boom.
Standards for the rental of residential premises are also as attractive: there was a pleasant 3% drop in 2016. Today, an average monthly charge per square meter in Athens averages €7-15, on Crete — €4-6.
Notary fees in a Greek real estate transaction have also dropped to 1% from the pre-crisis 1.2%-1.5%.
Which real estate projects are most attractive to investors? Those located in Athens, Attica, Thessaloniki, Halkidiki,on the islands of Crete, Corfu, Kefalonia, and other vacation destinations.
It is possible to purchase an apartment in Athens for €70,000, something more comfortable usually goes over €200,000. Objects for commercial purposes in the capital require approximately €300,000-500,000.
Crete is famous for its high-end villas with a price tag starting at €3-4 million.
Apartment prices on Corfu start at €300,000-€400,000, while private home prices at €300,000. Some of the most sensible options are located on the island of Ithaca, where cottage prices start at €400,000.
The primary requirements for a residence permit applicant are not too stern, and are the same for both an investor and an financially independent individual. The applicant is expected to comply with the following rules:
In either case, the main applicant is expected to obtain a health insurance.
By juxtaposing various components of the program will help you determine which option is most suitable for you.
Practice has shown that the vast majority of applications are based on purchase of real estate. Which is understandable, since it is possible to buy both residential and commercial real estate. The Greek real estate market has a lot of luxury offers for a relatively affordable price. The option of buying a real estate object and put it to use seems more rational than applying on the basis of financial independence.
Latvia, Spain, and Portugal have their own Golden Visa programs. Out of these three, Latvia has most similarities to the Greek program. Over the course of 6 years, they have issued about 16,000 residence permits – 14,000 of them for real estate investment. In Latvia, a minimum €250k investment is required in residential or commercial property (not included is an addition fee of 5% of the object’s cost). It’s also possible to invest in shares or bonds, or a business. The status of a Latvian resident is valid for 5 years, after which it is possible to renew it for a fee of €5,000. With the Latvian residence permit, it’s possible to obtain a European driving permit. One difference between Greek and Latvian programs is that the latter gives its holder the right to work.
As for Spain, there are 4 ways to enter its citizenship by investment program: purchasing real estate, investing in bonds, creating a company, or investing in bank deposits. Foreigners of means tend to choose the €500,000 investment in real estate. The status is granted to the spouse, children under the of 18 plus financially dependent children under the age of 26, and the parents. After the investor makes the purchase, the relatives included in the application by the investor get the status of residents automatically and with no additional fees or payments. Status validity is 5 years. It is possible to apply for permanent residency, and next for citizenship, after 5 and 10 years, respectively, of constant residence in Spain.
Now, on to Portugal’s Golden Visa program. It is one of the few European programs that allows to apply for a citizenship – in just 6 years after the residence ID-card issuance – via one of the 3 ways: buying real property, establishing a business and creating jobs for at least 10 Portuguese citizens, and direct investment in economy (the last one starts at €1 million). Again, the first option is the most popular one. Investment in real or commercial property, in any part of the country, starts at the €500,000 mark. It is possible to reduce the cost to €350,000 by purchasing an object that needs renovation or was built 30 years ago.
Portugal also has a more democratic real estate market than Spain: it’s much easier to find a property object worth €500,000-600,000 in southern Portugal, while in Spain, elite properties usually exceed €1 million. Another bonus of the program is that there are no age limits for financially dependent family members. But, there is a requirement for extending the permit: it is necessary to stay for at least 7 days per year in Portugal. Since 2012, over 5,000 foreign nationals have become Portuguese citizens, with 4,8000 obtaining the Golden Visa through real estate purchase.
Cyprus and Malta are offering their passports through economic investment as well. The Cypriot passport, in the case of residential real estate acquisition, costs €300,000; Maltese passport will cost €250,000 in case of investment in real assets, €270,000/€10,000 in case of purchase/lease of real estate plus €30,000 fee payment.