Greece: One of Europe’s last golden visa programs and what’s about to change

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Greece is one of the last countries in Europe that can offer a golden visa.

The controversial ‘settlement by investment’ scheme allows wealthy foreigners to ‘buy’ the right to stay in a country long-term.

Many EU countries have abolished golden visas in recent years due to security and inflation concerns.

Greece launched the program in 2013, during a decade of financial crisis. The visa was intended to bring money into the country during the housing market collapse.

This visa allows third-country nationals to become temporary residents when they purchase real estate of a certain value.

Initially, a five-year residence permit can be obtained with a real estate investment of €250,000 or more. Greecewhich may be converted to citizenship after seven years.

But last year, due to concerns about soaring house prices, the government raised the threshold to 500,000 euros in some areas of Athens. MykonosSantorini and Thessaloniki.

According to Prime Minister Kyriakos Mitsotakis, the amount could rise further to 800,000 euros.

Why is Greece raising investment thresholds for Golden Visas?

A Greek Golden Visa can also be obtained by investing €400,000 in government or private bonds or shares, but buying property is the most popular route to investment residency.

Mr Mitsotakis told parliament last week that the new investment cap standards for real estate would apply to areas facing housing shortages and rental price pressures.

He acknowledged that rents have increased by 40 percent since 2018, and property sales have increased by about 7 percent. Greece In recent years, it has been related to the Golden Visa.

“Rising sales prices have reached the point where permanent residents are unable to purchase homes that meet their housing needs in the current economic climate,” said Themistoklis Bakas, CEO of the national E-Real Estates Network.

“Specifically, from 2017 to the second quarter of 2023, the sales prices of new homes in Attica recorded a 71 percent increase, while at the same time the sales prices of older properties were depressed.”

Mitsotakis added that in some parts of the country where housing demand is not so tight, the threshold could remain at 250,000 euros.

The goal of the higher threshold is to reduce the inflow of funds into Greece while bringing more funds into the country. golden visa issued.

Short-term vacation rentals are straining local resources

In addition to driving up rents and property prices, investment housing schemes have been accused of straining local resources such as health care, especially in areas where properties are rented out for vacations through platforms such as Airbnb.

golden visa real estate owner People who plan to rent out their homes Greece Therefore, we may be forced to take long-term leases in the future.

But some campaigners are calling for the government to go a step further and remove the properties. golden visa investment options.

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However, the program will provide the Greek state with significant revenues of 4.3 billion euros between 2021 and 2023.

A rush to purchase real estate occurred due to increased investment in the previous Golden Visa

The government aims to control foreign property ownership, but Greece This announcement could backfire as investment in Golden Visa is on the rise.

“The moment the government announced the possibility of raising the investment limit” [in 2023]demand for real estate “The number of investors buying real estate for the Golden Visa has tripled,” Bakas said.

“In particular, foreign direct investment in the real estate sector reached 2 billion euros in 2022.”

In this way, Bakas explains: golden visa Particularly in areas of high demand, investment increases in a “one-way” manner.

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Instead, he wants the program to be used as a “local development tool.” Greece We need investment and new jobs. ”

“In Thessaly, for example, there was extensive damage. flood [of 2023]“Next year’s investment limit should be set at €200,000,” he says, “and to avoid problems with housing stock, this limit should only apply to new-build properties up to five years old. .”

Similarly, the threshold may be lower for those investing small amounts. village It aims to develop tourism and build student housing and affordable housing.

” golden visa “It’s not that the investment program is a bad program, it’s just that we’re not managing it properly,” Bakas said.