The new landscape in the real estate market after changes to Golden Visa

With the aim of addressing the housing problem, limiting demand to “fillet” areas and addressing market distortions with a reduction in particularly high prices, the Ministry of National Economy and Finance goes on to legislate to increase the limits for . At the same time, as government agents say, internal thinking is also not to create “fuscous” in cheap areas of Attica that will exacerbate the housing crisis. Essentially, with Golden Visa the ministry proceeds to establish three-speed limits depending on the geographical location in which a property is located, as well as the special treatment for those investing in preserved buildings. At the same time, the incentives for the introduction of investment funds into the country and the development of the real estate market are lost. In particular, as Minister Kostis Hatzidakis announced, for the granting of a five-year residence permit to third-country citizens (Golden Visa), the following conditions will apply from 31 March this year: -In Attica, the regional units of Thessaloniki, Mykonos and Santorini and in the islands with a population of over 3,100 inhabitants, the value of the real estate to be held by the person concerned increases to 800,000 euros. In the rest of the country, the value of real estate is €400,000. In each case the investment must be made in a property (not in more properties of less value) of at least 120 sq.m. Indivisible property ownership is allowed to be purchased, the minimum value of which is equal to EUR 800,000 and EUR 400,000 respectively. It is typical that these regions are a ‘magnet’ for foreign investors. For example, the northern and southern sectors of Attica (especially the part of the coastal Riviera), the center of Thessaloniki, Mykonos and Santorini. Today the limit of 500,000 euros concerned areas of the North Sector, namely Penteli, Kifisia, Metamorphosis, Halandri, Agia Paraskevi, Brilissia, Nea Ionia, Heraklion, Holargos, Papagos, Pefki, Lykovrisi and Maroussi. In the Southern Section respectively, in the municipalities of Agios Dimitrios, Alimos, Glyfadas, Greek-Argyroupolis, Kallithea, Muscat-Tavros, New Smyrna and Old Faliros and in the Central Sector the municipalities of Athens, Philadelphia- Chalkidonas, Galatsis, Painter, Caesarian, Byron, Helioupoli, Daphne Hymettus. In Piraeus, for example, prices have increased sharply over the last few years, with sales recording an explosive rise. The other provisions of the legislative regulation provide: – For buildings that currently have different use and are converted into houses, the minimum investment level is €250,000. The conversion of the use must be completed prior to the submission of the application for the residence permit. – At 250,000 euros the limit is also fixed if it is an investment in a listed building that is to be restored. As listed in the real estate market executives, the remaining property exemption, for which a lower minimum investment threshold will apply, aims to give incentives to foreign investors in order to invest in the asset class in which funds are needed to develop. Today, several owners are unable to take on the enormous cost of restoring a preserver, resulting in these buildings, to a large extent, being in bad condition. – Residence permits may be renewed for the same period (five years), as long as the property remains on the property of the investor. If it is an investment in a listed building, an additional condition for renewing the residence permit is that the restoration of the building is completed. If the investor sells the property, his residence permit is revoked and the buyer has the right to obtain a residence permit. – Investors can lease out the buildings they acquire, but they are not allowed to be made available through short-term leases, while in the case of conversion to a residence they are also prohibited from using them as a seat or branch of an enterprise. In the event of an infringement, the residence permit shall be revoked and a fine of EUR 50,000 shall be imposed. -In addition to buying real estate, third-country citizens obtain a residence permit and with the conclusion of a long-term contract of complex tourist accommodation or a time-share contract of tourist accommodation, corresponding to an area of value (800,000 euros in Attica, etc., 400,000 euros in the rest of the country etc.). According to Mr Hatzidakis, in order not to disrupt the functioning of the market, a transitional period is provided for under the following conditions: Citizens of third countries who will pay the price, or pay an advance of 10%, or sign a provisional or private purchase agreement, proving the relevant credits by 30 September this year, can complete their investment by 31 December this year under the conditions that have been in force so far. In such cases, if the purchase of the property is not completed, the buyer may complete his investment in another property, always under the conditions applicable until now, but not after 30 April 2025. Based on the real estate market executives, the Greek Golden Visa was last year the world’s most sought after. In this they advocate the elements of the Ministry of Migration Policy, according to which throughout 2023 demand hit “red”, as requests (original administration and renewal) amounted to 10,214, recording a high of 5 years. At the same time, 5,701 permanent investor licences were issued last year (4.231 initial and 1,470 renewals), based on the date of a decision on requests lodged from 2018 to December 2023. It is estimated that investments of at least EUR 1 billion were made in one year, as 4231 permanent investor licences, corresponding to equal number of real estate purchases, were issued with a minimum amount per transaction of EUR 250,000. In addition, 8,800 applications are pending. Source: RES-AE