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As of March 31, 2024, Greece has implemented some changes to its Golden Visa programme, which grants residency permits to foreign investors. Here's a breakdown of the key updates as per the government:
Higher minimum investment thresholds:
Previously, real estate investment in certain areas like Athens, Mykonos, Santorini, and islands with a population exceeding 3,100 required a minimum of $541,327. This has now doubled to $866,180.
For all other regions in Greece, the minimum investment has increased from $270,663 to $433,062.
Exceptions still exist:
The minimum threshold of $270,663 remains applicable for properties undergoing conversion from commercial to residential or for listed building restorations.
Transitional period:
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Investors who signed a pre-contract or private purchase agreement for a property by September 30, 2024, with a minimum investment of $270,663 or $541,327 (depending on the location) can still qualify under the old rules, provided they complete the investment by December 31, 2024.
These changes aim to make Greece's Golden Visa programme more selective and potentially drive investment towards higher-value properties. Business Standard explains these new changes in detail:
What is the Greek Golden visa programme?
The Greek Golden Visa programme provides a pathway for non-EU nationals to gain permanent residency through investment, offering several routes including real estate purchase, government bonds, and business investments. Real estate remains the preferred option, promising potential returns of 3-5% annually. The programme is attractive for its flexibility, lack of residency requirements, and the opportunity for immediate rental income from the acquired properties. However, the new regulations bring a shift, especially in terms of investment thresholds and property usage limitations.
Impact of the changes on investors
The upcoming changes impose a tiered investment model. In key regions like Attica, Thessaloniki, and certain islands, the minimum investment has been raised to $866,180. For other areas, the threshold is now $433,090, up from $270,681. These adjustments follow an earlier increase in August, where the minimum investment in popular areas was doubled to $541,362.50. Additionally, the programme now restricts investors to a single property purchase of at least 120 square metres, with a ban on its use for short-term rentals.
The government has outlined a transition period until September 2024, allowing current thresholds to remain applicable for investors who act swiftly.
In principle, Greece will have two types of zones:
— $866,180 in the administrative region of Attica, Athens, Thessaloniki, Mykonos and Santorini, as well as in islands with a populaton of over 3,100 inhabitants.
— $433,090 for all other regions of Greece.
Investors may not use properties qualifying through the conversion of commercial real estate to residential as registered company headquarters. Non-compliance with the property use restrictions will result in the revocation of the residence permit as well as an administrative fine of $54,136.
However, the Greek finance ministry has not specified whether the restrictions would apply to properties owned by already-approved Golden Visa residents
What led Greece to implement changes in the Golden Visa programme?
Greece’s economy has made a remarkable recovery since the debt crisis, which began in 2010. However, this economic recovery has been a double-edged sword, bringing with it a housing crisis in major cities and tourist hotspots, where rents have surged significantly.
Bloomberg reports that to address the affordable housing shortage, Greek politicians are tweaking the Golden Visa programme, initially launched in 2014. This scheme allowed foreigners to gain residency by investing in Greek property, but with rising housing pressures, the government has increased the minimum investment requirements. The aim is to temper foreign investment in the housing market, which is seen as a factor driving up property prices and rents.
Will changes in Golden Visa programme help in reining in housing costs?
With over 25,100 applications and 17,184 permits issued, mostly to Chinese investors, the programme has attracted significant foreign interest.
However, analysts point to a lack of housing supply, exacerbated by a halt in new construction due to the financial crisis and the conversion of long-term rentals to short-term ones through platforms like Airbnb.
"What is truly needed is incentives for the construction of new houses," Ilias Lekkos, Chief Economist of Economic Research & Investment Strategy at Piraeus Bank told Bloomberg, pointing out that around 18,000 people have participated in the programme since its inception, affecting only a small fraction of the housing market.
Piraeus Bank estimates a need for about 200,000 new units to satisfy demand nationwide.
Despite the adjustments to the Golden Visa programme, the consensus among experts is clear: the challenge of affordable housing in Greece is vast, requiring more than just regulatory tweaks to foreign investment schemes.
