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In 2015 we have seen exceptional growth in demand for golden visas from around the globe. The Middle East, Asia and Africa continue to show strong growth with countries such as India, Pakistan, China, South Africa, Nigeria and the UAE all demonstrating considerable interest in the various programmes on offer.
La Vida has dealt with over 5,000 enquiries this year from around the globe. Our team of advisors has been busy helping many clients find the right real estate investment to obtain their residency and citizenship. Our team is often visiting countries where local meetings can take place. But with demand so widespread it is not possible to visit each country frequently. However we are always available to meet with clients in our head office in London and most of our clients simply liaise by phone/email/skype with our consultants before coming out to meet our representatives in the country of interest for their intended residency visa.
A revision of rules for the golden visa in Portugal has left many potential applicants confused as to the rules and a great deal of misleading literature posted on the web suggesting the Portuguese golden visa limit has been reduced.
The qualifying real estate investment level for the golden visa in Portugal is €500,000. Earlier this summer the Portuguese government introduced a new investment level of €350,000 for certain categories of real estate.
The law states the following: “Acquisition of immovable assets, the construction of which has been completed, at least, 30 years ago or located in an area of urban regeneration and execution of refurbishment works in the acquired immovable assets…equal to or above 350 thousand euros;”
The point here is that even though this new option applies, it only applies to property that is over 30 years old or located in an urban regeneration area. It involves the execution of refurbishment works. This is an important aspect.
To qualify for the golden visa under such an investment requires the necessary permissions for renovation work on the building. Such permissions and payments to contractors all need to be done legally and of course within the tax structure so the necessary paperwork, proofs and payments are fully in order. To undertake such a project would mean employing project managers and the necessary architects. The applicant would have to have all the licences in place prior to any application being submitted which will of course delay any application for the visa. To mitigate any risk it is vital to ensure that any such property would qualify within this category. Clients would need to ensure they build sufficient time into their schedule to take care of all these additional aspects.
Clients visiting to invest €500,000 in a location such as Lisbon can usually complete the necessary tasks within a few days, accompanied by ourselves and our lawyers in a methodical, established and time proven manner. The alternative investment of €350,000 will require far more time and hands on management. Golden Visa applicants should be wary of companies offering such management for a fee and in particular remain conscious of the scope for overpaying for assets requiring reconstruction without the necessary independent professional advice from architects and surveyors. For any international client not residing in Portugal and trying to manage from a distance it can be problematic, time consuming and expensive.
The €350,000 is reduced by a further 20% to €280,000 for renovation in low density, less developed areas of the country. This naturally does not apply to the cities or the more populated coastal regions creating issues for any future rental income potential.
Applicants for the golden visa programme in Cyprus who are investing in real estate have received a boost following changes to the Capital Gains Tax law in Cyprus. Those acquiring a property in Cyprus before 31 December 2016 will avoid any capital gains tax on sale of the real estate irrespective of the date of sale of the asset.
The change is part of a package of measure introduced by the Cypriot government and enacted into law on 9 July 2015. A key change is the exemption from taxation for personal investment income for non-domiciled individuals who will no longer be subject to the Cyprus Special Defence Contribution (SDC) of 17% on dividends and 30% on interest.
Together with existing income tax exemptions this means that non-domiciled individuals will pay zero tax in Cyprus irrespective of whether the income is earned in Cyprus or abroad. The measures have been introduced to encourage high net worth investors to invest and reside in Cyprus.
It is important for any prospective investors to take careful professional advice on the programmes available before committing to an investment. There are many programmes on the market from differing countries, but not all of these lead to citizenship through investment.
The likes of Hungary, Greece and Spain are difficult or unlikely, sometimes requiring residence in the country. Portugal is far easier and Cyprus can be gained immediately with the right investment.
So what is citizenship and what benefits does it bring? Citizenship of any particular country within the European Union means a passport and importantly citizenship of the EU. So for example, if you gain citizenship in Portugal through real estate investment then you become an EU citizen. Similarly if you gain citizenship in Bulgaria through investment in government bonds you can also gain citizenship of the EU even though Bulgaria is outside the Euro and Schengen visa zone.
Every person holding the nationality of an EU country is automatically a citizen of the EU. This allows that person to move freely within the EU. To work, study and live wherever they wish within the European Union countries.
It is important to draw the distinction between the EU countries (there are 28) and the Schengen visa countries (there are 26). There are 22 EU countries participating in the Schengen visa zone and there are an additional 4 countries not part of the EU.
Residency in the Schengen visa countries allows freedom of travel throughout the Schengen area. But citizenship of an EU country provides the right to live and work within the EU countries. For example the United Kingdom and Ireland are EU countries, but not part of the Schengen visa zone.
Whichever country an investor targets for citizenship, there are sometimes faster, cheaper and easier options to gain permanent residency allowing them to live, work and study in that country by gaining entry through an alternative EU country.
It is possible to achieve citizenship through investment in real estate in Spain but the investor will need to live in Spain for 10 years before applying.
Citizenship can be applied for in Portugal six years after investment of a minimum €500,000 in real estate.
Citizenship is available in Cyprus within 2 – 3 months on investing a minimum €2.5 million in real estate.
Malta has an investment visa programme with a comination of investment and contribution totalling around €1.2 million with citizenship taking approximately 12 months.
Citizenship in Greece through its real estate investment programme will be possible following changes to legislation (2015).
Changes to legislation in Hungary mean the investor visa bond programme could lead to citizenship after 5 years rather than the current 8 years. (2015)
The investment bond programme in Bulgaria can lead to fast track citizenship by doubling the bond investment from €512,000 to €1,024,000.
For reference the EU countries are: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK.
The government of Dominica has introduced certain selected real estate investments as part of its citizenship investment programme. The Dominican citizenship programme running since 1991 originally only allowed investment through contributions. From this year investors can invest $200,000 in real estate plus fees to gain a second passport. Government and advisory fees for a family of four are in the region of $150,000. In total this still makes Dominica one of the most affordable citizenship programmes. The investment must be maintained for a minimum of 3 years. If maintained and sold after 5 years, it would qualify the next buyer for citizenship as well.
We have a limited selection of real estate on this superb Luxury Collection Resort. Each fully furnished apartment is offered with a guaranteed 5% return after costs, for 5 years. The apartments, offered freehold, are ideal for international investors seeking the Portugal Golden Visa and looking for a “hassle free” fully managed property. Owners benefit from six months usage in addition to the guaranteed annual return. This allows owners to become tax resident if they so which and take advantage of the Portuguese non habitual residency tax law.
A total of 76 luxury apartments adjacent to the golf course, will have magnificent views overlooking the sea and the spectacular Algarve coastline in Portugal. The interior designer was inspired by the many Portuguese Discoveries and the exquisite hand painted tiles. A perfect combination of a Luxurious & Classic Style of the Portuguese Culture and the Glamour of the Luxury Collection ® Brand, part of Starwood Hotels & Resorts.
Prices start from €780,000 for two bedroom two bathroom apartments. Contact us for further details, a full brochure and video link.
La Vida can offer a superb option for investment into St. Kitts to obtain a second passport and citizenship. Invest just $400,000 in order to gain St. Kitts and Nevis citizenship.
Koi Resort | Residences provides the optimal solution for wealthy individuals seeking dual citizenship or stunning vacation property. Koi is a title-deeded ownership residence that is currently in development on the Eastern Caribbean island of St. Kitts. Located on 14-acres of beachfront property on Halfmoon Bay, the resort will feature a variety of luxury villas and suites with sweeping ocean views and the very best in amenities.
Koi Resort | Residences has been approved by the government of St. Kitts and Nevis as a Citizenship by Investment project, and has also been qualified as a National Development Project.
During the 5-year holding period, buyers that purchase before February 15, 2015 are entitled to receive:
• KRL Worry-Free Credit of the Regular Annual Assessments during the 5-Year Holding Period, as a draw against future Rental Revenues.
• Early Buyer Credit of $29,057 to cover Real Estate Closing Costs (see below)
Real Estate Closing Costs
• Stamp Duty(Gov’t tax 5%) USD $ 20,000.00
• Government Assurance Fund USD $ 800.00
• Registration & Non-National Fee USD $ 57.00
• Attorney Closing Fees 1% USD $ 4,000.00
• Escrow Fees 1% USD $ 4,000.00
• Courier Fees ($100 each x 2 max = $200) USD $ 200.00
• Total Real Estate Closing Costs $ 29,057.00
Each title-deeded interest owner is entitled to:
• 7 usage days during the high season (November 1 to May 14), AND
• 28 usage days during the low season (May 15 to October 31)
• Access to: housekeeping, concierge, gym, spa, pool, tennis courts, and other amenities
• Projected Rental Revenues of 2-5%
5-Star Management Company handles:
• hiring and maintaining operational and management staff
• maintenance work for interior of residences, common areas and landscaping
• utilities, security, and other services
• fully furnished residences, regularly maintained
Complimentary One-year Membership to Elite St. Kitts- which provides the following services:
• Obtaining Residency Requirements
• Obtaining Driver’s License and SKN Biometric Passport Renewal
• Company Formation
• Banking Relations
• Foreign Visa Travel Updates
Lisbon and Porto the two largest cities in Portugal have seen a surge in sales of residential property since the introduction of the golden visa programme and the favourable tax regime for non-habitual residents. Research by Cushman and Wakefield shows a total of 1,362 homes were sold in Lisbon and 290 in Porto in the first quarter of 2014 a rise of 60% year on year for Lisbon and 30% for Porto. Average prices per sq. metre rose 18% in Lisbon and 8% in Porto.
With 1,775 golden visas issued in the first two years of the programme it is clear that demand of this magnitude from international investors has the ability to move the market. The research is consistent with our observations of rising prices throughout 2014 due to higher demand particularly at the €500,000 and above price level.
The outlook for 2015 is described as “positive” by Cushman and Wakefield. The pyschological factors affecting the market since the credit crisis have diminished and there are signs of improved lending conditions from the banks.
The government in Greece is introducing changes to its golden visa programme. The new rules allow three generations of family members to benefit from the visa. An investment of just €250,000 in real estate will qualify the applicant, parents (of both investor and spouse) and children for a five year renewable residency visa. There is no minimum stay requirement for applicants. Greece is a member of the EU Schengen visa zone so a holder of the Greek residency permit is allowed freedom to travel throughout the European Union. The investor will be able to sell his/her property to another foreign citizen, and transfer the residency permit together with the property.
One aspect of the programme changes is that the path to citizenship has improved but remains difficult. Changes to citizenship rules mean investors will now be able to apply for citizenship after 7 years of residency. But that requires living in Greece for more than six months each year and passing a Greek language test. Countries such as Bulgaria and Portugal require higher investment levels but more assured routes to citizenship and ultimate freedom of Europe.
Property prices in Greece have dropped as much as 50% since the credit crisis and are now showing signs of stability. Many local developers we work through are confident as the market for more desirable properties such as villas with good rental prospects in prime vacation areas are in demand. La Vida offers a portfolio of property in Greece including Athens, the surrounding coastal area and the islands. Some of these properties offer guaranteed rental for investors. Contact us for full details.
Perhaps one of the most sought after and immediate benefits of certain golden visa programmes in Europe is the granting of a Schengen visa.
The Schengen Visa represents a total of 26 European countries that have mutually decided to eliminate passport and immigration controls at their joint borders. Holders of a Schengen visa can travel freely throughout the Schengen visa zone.
Many investors see this as a key benefit. No need to continually be applying for a Schengen visa to visit Europe, as with the right programme this comes as part of the investor visa package.
But investors and their families need to check each programme carefully and in particular whether that country is part of the Schengen visa area.
For example, Cyprus offers residency through an investment of €300,000. But Cyprus is not part of the Schengen zone. Cyprus also offers citizenship through a €2.5 million investment in real estate. That grants citizenship of Cyprus and hence citizenship of the EU and hence an EU passport. A Schengen visa is no longer needed.
Investors and their families buying real estate to the value of €500,000 in Spain and Portugal will gain a Schengen visa. Likewise Hungary and Greece through their programmes.
The Schengen area countries are currently Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland and Liechtenstein.