The Greek government has announced that the increase in the minimum investment requirement for its golden visa program will apply to just 36 of about 330 municipalities.
Greece had declared its intention to double minimum investments for its golden visa, from €250,000 to €500,000, in the last quarter of 2022. Shortly after this announcement, the government clarified that the hike would apply to specific municipalities only.
The government says the increase will apply only to the 28 municipalities in the Greater Athens region, six in Greater Thessaloniki and the two islands of Santorini and Mykonos.
Why This Selective Hike In Golden Visa Investments?
European golden visa programs like Greece and Portugal have become victims of their own success. Offering visa-free access to the Schengen region and a host of other benefits, these programs are popular among wealthy investors from around the world.
With more than nine out of 10 Greece golden visa applicants choosing the real estate route, a torrent of foreign investment has flowed into its real estate sector, specifically its biggest cities and tourist hotspots.
Property prices in Athens and other tourist hotspots have risen so high that ordinary citizens are struggling to buy or even rent homes.
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Portugal chose the drastic option of barring golden visa investments in Lisbon, Porto and other urban centres. To qualify for the golden visa, investors must buy property in less-developed parts of the country.
Greece has chosen to make it more expensive for golden visa investors seeking to qualify through property investments in its biggest cities.
From May 2023 onward, investors buying properties in one of the 36 municipalities will have to spend €500,000 to qualify for the golden visa. For the other municipalities, the minimum investment continues to remain unchanged at €250,000.
Will The Investment Hike Hurt Demand?
A hike in minimum investment is bad news for investors, but Greece is unlikely to see a major dip in demand.
The fact that the hike is applicable to around 10 percent of the country’s municipalities is good news for investors.
Greece has also announced a long transition period. The hike in investment requirement comes into effect from May 2023. Anyone making a 10 percent deposit on a property in Athens until April 31 has until December 31 to conclude the purchase under the old threshold of €250,000.
So, a deposit of €25,000 or more to the seller of the property gives the golden visa investor until the end of 2023 to finalize the transaction.
Overall, there will be relief that Greece has not completely shut out investors from tourist hotspots like Athens and Santorini.
Greece may actually see a spurt in demand since it offers a more stable and predictable future.