Greece has put together a new set of rules concerning its Golden Visa program in a soften the impact on the local real estate market without scaring off foreign investors.
In a draft law submitted to parliament in December, different limits will be applicable to those taking part in the residency for investment scheme, depending on where the property being purchase is located.
How much will a Golden Greek Visa cost?
Currently, non EU residents can apply for the Golden Visa when they invest in real estate anywhere in the country to the order of 250,000 euros. This limit will double to 500,000 euros for those buying a home in north, south or central Athens - areas where demand is strong and the country's housing shortage is most felt.
Golden Visa investors picking up property in northern Greece's Thessaloniki and on the islands of Santorini and Mykonos will also be subject to the higher 500,000 euro limit, according to the draft law.
Those acquiring a home anywhere else in Greece will be subject to the existing 250,000 euro limit.
The review of the scheme comes after Prime Minister Kyriakos Mitsotakis caught the market by surprise in September when he announced that the amount investors will have to spend to qualify for the program will double to 500,000 euros from 250,000 euros.
This was met with an outcry from many in the business, who argued that the decision is harming the attractiveness of Greece as an investment destination.
Changes for citizenship for investment plan?
The Golden Visa plan offered by Greece has been one of the most successfully run globally, drawing strong interest from Chinese, Russian and Turkish buyers but the pandemic brought that positive momentum to a screeching halt. Since foreign home buyers have been returning to Greece, with an eye on the residency but interest remains well below previous levels.
Data shows that the total number of Golden Visas issued dropped by 544 in the first half of 2022 from 9,619 in January to 9,075 in June 2022, the first drop since the program was launched in 2014.
Local press is reporting that government officials are thinking of adapting new rules closer to what Portugal is doing. Among the options being considered in Athens is keeping the limit at 250,000 euros but only homes purchased in less popular parts of the capital will qualify for the residency plan. The idea is that this will avoid boosting demand in popular areas of central Athens and the capital’s beachside districts, in a bid to get a grip on residential price hikes.
Despite the drop off, though interest has once again picked up and this will appear on official data soon, according to lawyer Alexandros Varnavas, whose office specialises in Golden Visas.
He recently told Businessdaily.gr that the program is going unexpectedly well in the last few months and that this will be reflected in the summer 2023 figures.
This strong growth is seen despite the lack of Chinese investors, who are expected to return to the Greek property market on a large scale in 2023, and the sanctions on Russian nationals following the declaration of war on Ukraine last February, added the lawyer.
Portugal Golden Visa
Portugal may be leading the way forward for many but in Lisbon there are thoughts of doing away with the program.
Reuters recently cited Portugal's Prime Minister Antonio Costa as saying that several visa schemes offered by the country were currently being re-evaluated and the golden visa was one of them.
Tighten residence by investment rules, says European Parliament
The Golden Visa program may be bringing in foreign direct investment to EU members but in Brussels there is a discussion on how to limit the measure amidst concerns that governments aren't completing the right screening tests on those offered the residency permits.
Earlier this year, the European parliament passed a resolution calling on the European Commission to take action to reduce the risks stemming from the citizenship by investment (CBI) and the residence by investment schemes (RBI) offered by member states.
In particular, it asks the Commission to phase out CBI schemes in the member states, to comprehensively regulate various aspects of RBI schemes, to present targeted revisions of the long-term residents directive and of anti-money laundering legislation.
In response to the resolution, the European Commission said that it shares these concerns and that it intends to follow up on the proposals but has yet to take any specific action since then.