In the wake of the global financial crisis, international investors became a major driver of housing market recoveries, helping to snap up unwanted supply and fuel the gradual rebounding of property prices. As a result, a number of countries have introduced residency schemes designed to encourage investment from abroad in their economy and real estate. These “Golden Visa” schemes have since become a mainstay of European property, attracting non-EU investors keen to enjoy the reward of visa-free travel within the Schengen Area.
As countries such as Portugal, Spain and Cyprus show increasing signs of recovery, and Chinese buyers show no sign of slowing down their investment overseas, Golden Visa schemes have become even more attractive and even more sought-after, promising strong returns as well as the perks of citizenship.
On TheMoveChannel.com, a steady growth in demand for Cypriot real estate during 2017 has been, in part, due to interest in citizenship opportunities. Spain’s Golden Visa scheme, meanwhile, saw investment rise 63 per cent year-on-year in 2016, after a lacklustre initial response. Portugal, meanwhile, has generated over €2.3 billion investment with its scheme, as of the end of last year. Indeed, citizenship specialists Henley & Partners ranked Portugal’s residence program as the best in 2015, considering factors such as reputation, quality of life for residents, visa processing time and citizenship requirements.
Since then, though, a number of other countries, such as Turkey, have joined Portugal and Greece in introducing their own Golden Visas. Which is best? How much do they cost? Which country is most popular among overseas investors? And can investors expect house prices to rise or fall? We pit the main EU residency schemes (and their property markets) head to head to break down everything investors need to know.
Minimum Investment: €500,000
Country Popularity: 3.3% of enquiries (April 2017)
House price growth: 4.8% (Q4 2016)
Portugal’s Golden Visa scheme is the most successful of all, generating over €2 billion investment since its introduction. This is even taking into account a brief period of suspension, due to a money-laundering scheme linked to the officials operating the scheme. While the Algarve is traditionally the most sought-after destination among investors on TheMoveChannel.com, thanks to the area’s beautiful beachside holiday homes, Lisbon is the primary target for Golden Visa buyers, thanks to the draw of city life and the capital’s business and financial connections. Chinese buyers have made up over 8 out of 10 visa approvals to date, although investors from Brazil, Russia and, increasingly, South Africa are also significant players.
Residency visas are valdi for one year and can be renewed for two years. Investments must remain for a minimum of five years, although investors only have to reside in the country for seven days of their first year to be eligible for renewal.
Minimum Investment: €300,000
Country Popularity: 3.2% of enquiries (April 2017)
House price growth: -1.3% (Q4 2016 – Knight Frank)
Cyprus’ Golden Visa wins bonus points simply by being more affordable, requiring a minimum investment of €300,000 to be eligible for residency, as long as €200,000 of that is paid before your application. Residency permits also include the spouse of the investor and children. However, those wishing to gain immediate access to the Schengen Area will need to apply for a visa first. EU Citizenship, meanwhile, is also offered to investors spending €2 million. Combined with the island’s favourable tax schemes, and the fact that it only takes six months to obtain an EU passport, mean that the scheme is fast as well as affordable. Indeed, Cyprus has ranked in TheMoveChannel.com’s Top 10 destinations three times in the last six months.
Minimum Investment: €500,000
Country Popularity: 10.4% of enquiries (April 2017)
House price growth: 1.5% (Q4 2016 – Knight Frank)
Another of the most expensive Golden Visa schemes in Europe, Spain’s program has paled in comparison to the booming success of Portugal’s. Investor visas in Spain can be renewed every two years, with permanent residency and citizenship available after five and 10 years respectively. Investors don’t need to live in Spain to renew their permit, although they do before applying for full citizenship. It is this requirement that has helped to make Portugal’s scheme more popular, although Spain does allow investments to be made up of several smaller properties worth a total of €500,000.
Minimum Investment: €250,000
Country Popularity: 0.5% of enquiries (April 2017)
House price growth: -0.3% (Q4 2016 – Knight Frank)
Greece has taken the opposite route to Spain and Portugal, launching one of the most affordable Golden Visa schemes in Europe, with a minimum threshold of just €250,000. Permits include families and can be renewed every five years, as long as ownership of the investment is retained, while investors are not required to reside in the country for the permit. Full citizenship, however, is only available after an investor has lived in the country for seven years. The result is an attractive and competitive scheme, but one that has been held back by the wider Greek economy and housing recovery. Nonetheless, Greece has generated over €300 million in investment since 2013.
Minimum Investment: €1 million
Country Popularity: 0.6% of enquiries (April 2017)
House price growth: 12.2% (Q4 2016 – Knight Frank)
Turkey launched its own Golden Visa at the start of 2017, offfering full residency to investors who spend a minimum of €1 million on real estate. There are some drawbacks, including the fact that Turkey is not part of the Schengen Area, which means that the visa-free EU travel perks aren’t available. While that might sound like a poor deal for such a high threshold, Turkey’s visa is targeted at an already engaged audience, with wealthy Gulf and Chinese investors already spending heavily on Turkish real estate. Chinese companies have invested over $18 billion in Turkey in the last decade, while Istanbul’s profile as a business destination has improved over the same period, fuelling rising house prices. With Turkey’s currency weak against China’s RMB, there are many factors that can combine with the visa scheme to boost buyer interest. Indeed, the government predicts that the law will stimulate an additional $1 billion in revenue from real estate in 2017.Google+