La Vida offers a choice of several golden visa programmes for investment in residency and citizenship….
Portugal has proved to be the most popular destination in Europe for investors seeking a golden visa. Full residency is granted but there is no requirement to reside. Citizenship can be applied for after six years.
The Portuguese golden visa is a central feature of the government’s drive for international investment. With the country returning to growth the real estate market offers exciting prospects for the years ahead.
La Vida offers a choice of several golden visa programmes for investment in residency and citizenship….
Cyprus offers citizenship for investment levels of €2.0 million in real estate which is one of the big attractions of this programme. A Cypriot passport allows freedom to travel, study, work or live throughout the European Union.
Cyprus also offers residency through investment of just €300,000 allowing full family qualification. The investor visa is flexible with no requirement to live in the country.
La Vida offers a choice of several golden visa programmes for investment in residency and citizenship….
Spain is a firm favourite for many clients considering real estate investment to obtain a golden visa. One of the larger economies in Europe offering an investor visa programme.
Invest from €500,000 in real estate to gain the Spanish golden visa. This provides a flexible residency option. Permanent residency and citizenship can be applied for at a later stage subject to certain stipulations.
Greece offers a residency visa through property investment but eventual citizenship is not available to foreigners. Greece is a member of the EU Schengen visa zone and has no minimum stay requirement.
Prospective investors need to carefully consider the status of the economy in Greece, the real estate market and related property taxes. Greece offers a higher risk investment than other European nations.
Malta offers an Individual Investor Program which is appropriate for our very high net worth clients. In addition to committing to a residence in Malta for five years the scheme requires investment in government approved funds and instruments.
The Malta visa scheme leads to citizenship within one year for suitable applicants, a passport from an EU country and hence the freedom to live anywhere within the EU. The total investment required is typically in excess of €1.2 million.
The citizenship by investment programme for Grenada is one of the newest programmes available to investors. The Grenada passport offers visa-free travel to over 70 countries including the UK.
Grenada offers a low investment threshold. Applicants need invest just $250,000 in a government approved real estate project and maintain the investment for at least 4 years.
The citizenship by investment programme for Antigua and Barbuda provides a second passport to investors offering visa-free travel to over 100 countries including the UK, EU Schengen zone and Canada.
There are several options for investment to gaining citizenship in Antigua including real estate investment of a minimum $400,000.
The St. Kitts & Nevis Citizenship by Investment Program is the oldest of its kind in the world. Established in 1984 the program grants citizenship through real estate investment to qualified applicants.
The government requires investment of $400,000 plus related government and due diligence fees. St Kitts offer visa free travel to over 120 countries. An ideal choice for a second passport.
According to Portugal’s National Institution of Statistics, a recent report shows that in the third quarter of 2016, house prices had risen by 7.6% compared to the previous year, with a growth of 1.3% just from Q2- Q3 of 2016 alone.
In the period of July- September 2016, Portugal saw an impressive 31,535 property transactions; a 15.8% increase compared to the same period in the previous year. These sales generated a total value of €3.6 billion! The area responsible for the largest proportion of sales was Lisbon, accounting for 34% of the whole country’s property purchases.
The market has been steadily growing since the economic crisis back in 2012/13, and property prices have shown significant signs of growth in the past few years. Since Q1 of 2013 we are now looking a total property price increase close to 14%. There does not seem to be any sign of these rises slowing down either, with an average appreciation rate of around 4-5% per annum.
The Golden Visa Scheme is certainly one of the major contributing factors for these price increases, as Portugal has seen a great boost in their economy since the introduction of residency visa programme back in Oct 2012. The visa programme remains strong, and is still one of our most popular schemes for those looking for a flexible residency scheme in Europe with the opportunity to apply for citizenship after just 6 years. For more details on this programme please contact our experts.
According to the most recent RICS Property Price Index Report for Cyprus in 2016, there has been some promising signs of growth within the real estate market. Paphos was one of the strongest regions with an average price increase of 1.77% on residential houses. The prices of flats also rose steadily in Limassol at a rate of 1.4% on average; and there was an overall growth of 1.6% for holiday apartments throughout Cyprus.
Rental values have also increased across Cyprus by 0.7% for apartments and 3.3% for houses. The average ROI for rental property now stands between 3-4% per annum.
It seems that the economy and real estate market are finally stabilizing following the economic crisis back in 2013 and according to a recent report from KPMG this is primarily a result of the government’s Citizenship by Investment scheme. In the first two quarters of 2016, the total number of property deeds of sales increased by over 28% in comparison to 2015. Tourism, financial services and real estate account for nearly 80% of Cyprus’s GDP, so a rise in the property market will have a great effect on lifting the overall economy.
Now that the market seems to have bottomed out in most area’s, there has never been a better time to buy in Cyprus with great potential for future capital appreciation. We foresee further price rises in 2017, making it an excellent time to buy.
Cyprus remains the fastest Citizenship by Investment programme in Europe offering investors a second passport within just 6 months following a real estate investment at €2m. Dependent children up to the age of 28 years old can be included under a family application and grandparents can also be included for just an additional €500,000. The real estate investment must be held for 3 years, after which investors only need to retain a residential investment of just €500,000 for the future. As Cyprus is a full EU member a passport here will enable one to live, work and study in any EU country, currently still including the UK.
For more details on this scheme, please contact our specialist consultants today for further advice.
One of the most beneficial amendments is that older dependent children up to the age of 30 years old can now be included under the one family application. This is one of the highest age limits for children that we have seen across the various residency and citizenship programmes that we offer and can fill a gap in the market.
The age limit for dependent parents has also been lowered from 65 to 55 years old, offering more flexibility for family applications. And lastly dependent children born after citizenship has been granted and under the age of 16 will also be eligible for citizenship.
The St Kitts and Nevis Citizenship by Investment programme requires a real estate investment of €400,000 + costs and will grant investors and their family members citizenship within 3- 4 months. A St Kitts Passport will enable visa free travel throughout several key areas, including the Schengen zone, UK and Canada.
One of our most popular real estate investments projects in St Kitts has been this 5* Hotel Resort. Here investors can expect to find high quality luxury hotel apartments with sensational views across the crystal clear Caribbean sea. For more details, please contact one of our consultants.
This year 2016 has proven to be a further step on the ever developing market for investor visa programmes. Demand is increasing for most schemes, many programmes have changed and further amendments are expected in 2017. With a Trump victory, Brexit and European immigration concerns we can expect major changes to continue into 2017 and 2018.
We have highlighted below some of the key developments in 2016 and expectations of change in the year ahead.
The delays in SEF in processing golden visa applications in mid 2015 led to a drop in numbers. However a new fast track procedure introduced earlier this year has put applications back on track. The number of approved applications in 2016 looks set to be the highest ever running at over 2000 investors per annum. The introduction of a €350,000 limit for renovation projects is taking time to produce the necessary supply. Such projects are complicated and need to be fully managed. La Vida has sourced some interesting options for clients and we will see more of these in 2017. The property market is gaining strength in Portugal with price rises over the last three years now fuelling growth and demand. Developers are reluctant to offer discounts and the best properties are sold long before completion.
There were some key changes introduced in 2016 to the Cyprus citizenship and residency programmes.
The qualifying real estate investment level for citizenship was reduced from €2.5 million to €2.0 million. The timescale for achieving the pasport increased to six months as it is now necessary to hold residency (but not necessary to live in Cyprus) before being issued a passport. It still remains the fastest route to EU citizenship.
The residency programme was amended to include parents. Three generations can now be included for an investment of just €300,000 in real estate. A key benefit is that this is for Permanent Residency (PR).
Changes for 2017 could see Cyprus becoming part of the EU Schengen zone. Anyone obtaining the Permanent Residency before that point will no doubt retain it should Cyprus enter Schengen. The EU has not allowed any Schengen country to issue Permanent Residency immediately on investment. Should Schengen happen then we can expect some changes to the programme. Investors may be wise to act sooner to grab the benefits on offer.
The economy in Cyprus may well see a further boost in 2017 with the discovery of huge natural gas resources off the coastline and the development of its first casino under the Hard Rock brand.
Political developments in Hungary could well see the end of the residency bond visa programme in 2017. It has been possible to obtain residency in Hungary through a €300,000 investment in government residency bonds. However Hungary’s nationalist opposition party Jobbik is seeking an end to the programme in return for its support on other matters. Parliament closes this week so unless change happens in the next few days we can expect no further developments until at least February 2017. Still time for any investor to get their application in ahead of any changes.
We can expect changes in 2017 to the recently launched citizenship programme in St. Lucia. The scheme has been in operation less than 12 months but there is a new government in place and new ideas and our conversations with those close to the programme suggest a more coordinated and consolidated programme will be launched in 2017.
The Spanish government made some changes to its golden visa programme in 2016 but nothing that enables it to seriously compete with some of the better schemes on the market.
The government is reaping the benefits of its $100,000 contribution limit. The caribbean countries are concerned that this is a race to the bottom in terms of sale of passports.
Expect changes to the St. Lucia citizenship by investment program in 2017. A change of government has already led to a $100,000 donation offer until 31 March 2017.
Cyprus has reduced the investment level required to gain citizenship from €2.5 million to €2 million. The recent move means EU citizenship can now be obtained in just 3 months with a Cypriot passport being issued soon after the investment is made by the applicant in real estate in Cyprus.
The recent move approved by the Cypriot parliament has also introduce further positive measures for applicants. It is no longer necessary to be part of a collective of five investors to obtain the lower investment limit. Parents of the applicant can also now qualify for citizenship provided they make an investment of €500,000 into real estate. This extends the Cypriot citizenship to three generations which includes children up to the age of 28.
The benefit to Cypriot citizenship is that the country is a full member of the European Union. Anyone holding Cypriot citizenship is an EU citizen and has the right to work, live, travel or study anywhere in the European Union, including the UK.
La Vida has processed a number of property investments in Cyprus in the last two years and we expect a boost following the recent reduction in the investment limit. We have also seen a surge in interest following the announcement of the UK to leave the EU. We expect this to result in increased applicants for Cyprus citizenship in the coming months as investors rush to beat any deadline from the UK imposed on EU citizens looking to settle into the country.
Despite popular belief there are very few European countries that offer residency through investment in real estate. These programmes guarantee the investor residency provided they meet some straightforward criteria. In some countries residency may progress to citizenship (Portugal, Spain, Greece) and in the case of Cyprus then citizenship by investment in real estate is immediate.
The countries offering this are Spain, Portugal, Cyprus, Greece and to some extent Malta, although further conditions are attached in addition to the purchase of property.
European countries without such golden visa programme for real estate include Albania, Andorra, Armenia, Austria, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Hungary, Iceland, Ireland, Italy, Kosovo, Latvia, Liechenstein, Lithuania, Luxembourg, Macedonia, Malta, Moldova, Monaco, Montenegro, Netherlands, Norway, Poland, Romania, Russia, San Marino, Serbia, Slovakia, Slovenia, Sweden, Switzerland, Turkey, Ukraine and the United Kingdom.
Many European governments do offer residency through investment but that investment tends to be aimed at entrepreneurs aiming to create business and jobs in the country. Often there is an application process involving interviews and a consideration of business plans. In this sense the outcome is not guaranteed.
International investors who moved early for the golden visa in Portugal are now looking at real estate gains of over 10%. Those who bought early in the programme in 2012 will have seen average price rises of 10.2% in the last 3 years according to house price data released by the government.
While this no doubt is great news for our existing investors, those still considering Portugal for the residency visa offered through real estate investment are advised to act quickly.
Prices in Portugal and the capital Lisbon are not just rising but accelerating. The average rise in property prices over the last 3 years has been 3.4%. However prices in the last 12 months have risen 5.1% and are expected to at least continue this trend in the coming year.
That means anyone considering a property purchase is likely to pay at least €25,000 more for their investment in a year’s time if they invest at the minimum requirement of €500,000.
The trend in prices is backed up by our own practical experience as real estate agents. We are seeing rising construction in prime areas such as Chiado and Avenida de Liberdade in central Lisbon. Developers however are starting to hold back on releasing projects, preferring to complete developments before marketing them, safe in the knowledge that prices are likely to be higher.
The demand at €500,000 and above is fueling faster price growth for prime residential property. Over 2,000 international investors each year are entering Portugal for residential real estate on the back of the golden visa programme.
La Vida has seen strong demand for recent projects in Lisbon. Centrally located close to Avenida de Liberdade we have a brand new renovation of 90 apartments that have just been released off plan offering arguably one of the best real estate investments in Lisbon currently. Contact for brochure. Likewise in the prestigious area of Chiado where we have a development of 37 apartments with views over the city and Targus river.
Outside the capital we have a new resort development in Cascais, 30 minutes from the city, released April 2016. This is built to the same quality and standards as the luxury development we offer on the Algarve which has proven popular with investors attracted to its 5% rental guarantee.
For advice and further information on our projects please call or email our real estate consultants or complete your details here.
Investors who invest in Cyprus real estate can gain residency or citizenship depending on the level of investment:
A key factor for many investors in addition to the residency visa and passport is the return on investment (ROI).
There are two factors affecting a property’s ROI and its profitability:
• Rental income
• Capital appreciation
They are two types of rental.
Long term rental – is for a period of one year and more. This rental is used by Cypriots and foreigners permanently working in Cyprus. Proximity to the sea for this type of lease – is not necessary. There are disadvantages of such proximity – high humidity, the tourist noise.
Short-term rental – is for the period from several days to several weeks. It is for holidaymakers and an alternative to accommodation in hotels. Property for such rental should be located close to the sea and have swimming pool.
Yields on long-term leases are around 4% per annum. Short-term rental yields are slightly more – about 5.0%-5.5%. However, in case of short-term lease some renovation should be made from time to time.
Capital appreciation on real estate is a factor that ultimately provides investors with greater profitability potential.
The prices in the Cyprus real estate market will grow in the medium and long-term perspective. Our optimism has solid foundation based on key economic factors. Briefly the drivers of market growth are:
1. The growth of the whole Cyprus economy. According to IMF forecasts, the Cyprus economy will grow in 2016 by 1.4%. The European Commission estimates the Cyprus GDP growth rate – 1.5% in this year and 2% in 2017.
2. Start of industrial extraction of natural gas in 2019. Large offshore gas deposits have recently been discovered in the Exclusive Economic Zone of Cyprus. The value amounts to 300%-3000% of GDP. Naturally, the gas production will boost the island’s economy. In addition, new industry will require relocating to Cyprus many foreign workers and that will push up property prices.
3. Construction of the first casino resort is set to increase the number of rich tourists up to 1.0 million a year. This will add to 2.6 million tourists currently visiting the island every year. The casino resort is planned to be the largest in Europe. The growth of tourism will increase demand for rental property and hence the price of that real estate.
4. Reduction of property taxes:
• Capital Gains Tax. Capital Gains Tax on property purchased during the period between July 16, 2015 and December 31, 2016 and sold anytime in future for a bigger price, will not be charged
• Transfer Fee. Transfer Fee for property subject to VAT payment is not charged. For a property that is VAT exempt and is purchased before 31 December 2016 Transfer Fee rate is reduced by 50%.
• VAT. When property is purchased, a reduced VAT rate amounting to 5% (subject to a number of simple conditions) will be charged instead of the current rate of 19%.
5. Non-domicile tax residents of Cyprus are exempt from paying taxes on dividends and interest on deposits, earned in Cyprus and around the world. This means that foreigners who have moved to Cyprus, do not pay taxes on the dividends earned somewhere else (the rule is valid for 17 years after the move). It is expected that many wealthy foreigners will take advantage of this opportunity. They will need premium class properties for living, rising demand and prices in this real estate segment.
The following are our recommendations and approach for finding properties for our clients with the greatest growth potential.
1. Property must be new, not resale. Real estate, which was built in Cyprus in large quantities, say, 10 years ago, was designed for the British – then the main buyers of Cyprus property. Unfortunately, their low requirements thoroughly spoiled that property. For a number of reasons (for example, due to the fact that houses/apartments were considered only as holidays homes), the British did not mind that properties had no heating systems and proper insulation, and the internal and external design was primitive. Currently, such Real estate is obsolete and is not in demand, despite of falling prices.
2. Property must have high specifications of construction and finishing. There must be high ceilings, efficient heating systems, expensive flooring, tiles, sanitary and kitchen ware. Real estate should look stylish and modern. Such property can be sold in future with good profit.
3. We recommend to buy in the premium segment of the market. Generally, the Cyprus property market is shifting towards more expensive housing. This is evidenced by the dynamics of sales. In recent years, sales of expensive property have been increased, while economy class property stagnates.
4. If an investor buys a property at the initial stage of construction, he/she can expect a good discount to the price. This provides a good capital appreciation.
5. Real estate on the first line to the beach in Limassol and other cities is characterized by permanently good demand. The demand is high while the supply is limited (only few plots of land on the first line in the cities are available). This pushes the prices on sea front properties up.
6. Properties in the tourist area of Limassol, located in walking distance to the sea, are very popular among foreign buyers. Their prices steadily grow. First of all, this applies to large 3 and 4 bedroom apartments.
7. There are several prestigious hills in the nearest suburbs of Limassol. Buying a luxury villa on one of these hills – is a good investment for an applicant for passport.
8. Properties on golf resorts have good prospects. Not any golf property, but having certain specific characteristics. For example, the panoramic unobstructed sea views. Such properties are often sold before their construction is even started.
9. The growth of the culture of the Cyprus construction industry, combined with the increased requirements of buyers have led to the emergence of properties with unique (for Cyprus) and advanced (for the world) architectural solutions. These properties will give a high profitability due to its fashionable image. And also due to the fact that the time of design, obtaining of all necessary permissions and construction of such properties is so long, that they will never be in excess.
Let’s now estimate the possible figures of ROI, which can be received from the Cyprus property recommended above. The total profitability is a sum of Rental income and Capital appreciation.
• The average annual rate of long-term rent in Cyprus is 4%.
• Property market value will grow (according to conservative estimates) by 30% over the next 5 years, an average of 6% pa.
Together combined this gives an average return of 10% per annum.
Our assessment of the Cypriot property market is very positive over the coming years. However investors should be aware that in any market, property prices can vary, they can fall and they may not achieve the predicted forecasts.
Please contact us on 0044 207 060 1475 for a personal assessment with one of our Cyprus real estate consultants.
Real estate investment in countries such as Portugal and Cyprus is beginning to look attractive as markets start their recoveries.
Prices of real estate fell significantly in many European markets after the credit crisis started in 2008. After several years of recession, economic growth returned to the EU in 2014 and European countries are beginning to show strong recovery. On the back of this economic recovery, real estate prices are rising from all-time low points.
Property prices in Portugal rose 2.8% in the six months to 30th September 2015. A recent forecast from the University of Barcelona predicted property price rises in Spain of 12% in 2016 and as much as 50% over the next four years.
Price to income levels in Portugal and Cyprus in particular are some of the lowest in Europe suggesting upside as the market continues its recovery.
Rental yields are high in Portugal after traditional middle class buyers were kept out of the market post credit crisis due to lack of bank lending. There are many years of pent up demand from buyers who have been forced to hold back and rent their property rather than buy. The real estate cycle has reached a new phase in these countries and there is significant scope for catch up with the rest of Europe.
Countries such as Spain, Portugal, Greece and Cyprus have significant scope for capital growth in the coming years. Banks are lending again and improving economies are bringing domestic buyers back to home ownership.
Spanish property prices appear to be rising and could climb by 12% in 2016 according to an article published in the Spanish daily newspaper El Mundo recently. Barcelona University professor and real estate expert Gonzalo Bernardos explains the reasons behind rising prices and why the market could rise as much as 50% over the next four years.
Currently, the residential market in Spain is expanding. In the second quarter of 2015 the annual increase of housing prices was 4% and the level of transactions rose by 13.9%. The first signs of a rising market were observed in the main cities in late 2014. However, “nobody should expect the formation of a new bubble”, as all the main variables including market price, housing starts and percentage of household income devoted to making mortgage payments are far from the level they reached in 2006 and 2007.
The main reasons for the rise in price of housing are:
Once adjusted for inflation, most are worth less than half that in 2007 and about the same as in 2002. Bernardos claims that at present buying a well located home is a great opportunity, and that in 2016 prices will rise by 12%.
The willingness of banks to grant more mortgages. Today, banks have plenty of liquidity and are earning low margins on lending. Mortgage loans are attractive to the banks. The loans are less risky and lead to cross selling of products. Banks are keen to lend again in the property market and easier credit will fuel prices. The number of residential mortgages issued climbed by 28.5% in the year to July 2015.
With low returns on deposits and volatile equity markets many risk-averse investors are turning to the real estate market. Bernardos says housing offers a mix of high expected capital gains (up to 50% in what remains of this decade), and rental yields of around 3.5%, better than savings accounts.
Many households in Spain sat out the crisis in rented accommodation, waiting for house prices to bottom out, for the economy to improve and mortgages to get cheaper. With those conditions now in place and the Spanish economy growing at an annual 3.1%, Spanish families are jumping back into the market, unleashing pent up demand.
In short, Bernardos says a new stage in the housing market has begun in Spain. However, nothing will be the same as the boom and bust of recent years. All said, this is encouraging news for investors looking to buy for the Spanish Golden Visa.