GOLDEN VISA: MYTHS AND TRUTHS

"Golden Visa": An opportunity for growth or a burden on the Greek property market?

The "Golden Visa" programme is an important institution that has been developed in most EU states, so that through an internal monitoring mechanism, with corrective measures, it can keep pace in time with the continuous evolution of each country's property market. In recent years several member states, either partially or entirely, have revised the "Golden Visa" programme in an effort to strike a balance between investment and housing needs.

In our country, it was introduced at a time of deep economic crisis, with the property market sinking into prolonged depreciation. In this way the state, in an effort to revive investment interest, implemented the "GOLDEN VISA" Programme through Law 4146/2013.

To fully grasp the level of values of that era, it is enough to note that a property with a present-day value of 250,000 euros was, in 2013, being traded for between 70,000 and 90,000, and in many cases even lower. The programme grants a five-year residence permit, with the right of renewal, to citizens of third countries, on condition of the purchase of real estate worth 250,000 euros, thereby securing for investors free movement within the Schengen Area and easier access to a work permit.

Unfortunately, however, when a programme is not framed by a regulatory plan, with a strategy for its growth and management, its side effects will inevitably outweigh its benefits, with the result that, 10 years on, on the one hand a large amount of revenue has been recorded, but on the other a host of pathologies can be identified, arising from the distortions created by the unschooled investment environment of the property market.

But what are these side effects? Asking prices in some areas shot up to outrageous levels, mainly driven by owners who, with an arbitrary and entirely simplistic reasoning, assumed at the first exploratory enquiries from foreign investors that the area of their property had been transformed into an investment paradise.

Until 2023 the programme was left without reforms and without amendments to adapt to the changes in the property market, especially after 2017, when prices were gradually approaching pre-crisis levels. In 2019 we had a record number of applications, which continued at an undiminished pace in the following years, with the only exception being 2020 due to the pandemic. Indeed, the consistent champions of the institution are the Chinese, followed in the top five by investors from Turkey, Israel, Lebanon, Russia (before the war) and Egypt.

With the new amendment, the threshold is raised from 250,000 to 500,000 euros in areas of high investment interest, specifically in the municipalities of Athens and Thessaloniki, as well as on popular islands such as Mykonos and Santorini, in an effort to balance the housing market by boosting the stock available for owner-occupation. Indeed, according to the first indications, a shift of investors towards Piraeus and Kalamaria can be observed, resulting in rising prices due to the surging demand. Another key difference is that, in contrast to the original programme where the amount of 250,000 could be split across two or more properties, with the amendment the 500,000 must be placed exclusively in a single property.

In recent months there has been a major discussion about the transitional period of the "Golden Visa" programme, as it has been shown to significantly boost state revenue, and for this reason there is a line of thinking that it should be retained with certain modifications.

Bodies, professionals in the sector and owners, however, must weigh the opportunity cost through a comprehensive development study, which will prevent the property market from repeating this anarchic cycle with its unpredictable fluctuations. At the same time, however, it will strategically upgrade certain areas, encouraging residence investors to invest in a safe and modern urban model of quality living.