Count Down: Greece’s Golden Visa Policy Transition Period Shortened by 1 Month

On April 2, 2024, according to local time in Greece, the Greek government introduced the second round of amendments to the golden visa regulations. It is presently awaiting final approval through parliamentary vote. One of the most significant changes is the advancement of the implementation of the new policy from the initially scheduled date of September 30th to August 30th.

Image Source: Screenshot from the live broadcast of the Greek Parliament Television Channel

Policy Remains Unchanged, Implementation Advanced

According to the new legislative framework adopted by the parliament vote, there are two main aspects of the policy. One aspect concerns the regulations regarding investment areas and implementation timelines for granting Greek golden visas to third-country nationals, which are as follows:

1. For units in the regions of Attica, Thessaloniki, Mykonos, Santorini, and islands with a population exceeding 3,100, the investment threshold is raised to €800,000, with a restriction to purchase only one residential property of at least 120 square meters.

2. Real estate in other areas is subject to an increase in investment to €400,000, with the same restriction of purchasing only one residential property of at least 120 square meters.

3. For buildings currently used for different purposes and converted into residential properties (the conversion must be completed before submitting the residency permit application) or investments in heritage buildings awaiting restoration, the investment threshold remains at €250,000.

The above provisions remain consistent with the initial proposal, with the implementation timeline advanced from the originally scheduled date of September 30th to August 30th.

On the other hand, Michalis Katrinis, representing the second largest political party in Greece, the Panhellenic Socialist Movement (abbreviated as PASOK), reiterated during the meeting the call for the abolition of the “golden visa policy” or the closure of all investment immigration channels.

(PASOK is one of Greece’s longstanding political parties, alternating in government with New Democracy before the debt crisis. It held power in Greece from 1981-1989, 1993-2004, and 2009-2011.)

It is worth noting that, according to local media reports, the Ministry of Interior is considering legislation to grant golden visa holders the right to work within Greece. Predictions suggest that this measure may provoke further opposition from the local Greek population and potentially increase support for opposition parties, thereby possibly expediting the process of abolishing the golden visa program.

Image Source: Screenshot from the live broadcast of the Greek Parliament Television Channel, featuring the speech of the representative from the Panhellenic Socialist Movement (PASOK)

Escalating Housing Issues and Touristic Transformation of Urban Centers Prompt Continuous Elevation of Golden Visa Thresholds

Greece’s increasingly popular golden visa program was initially introduced to stimulate real estate investment and the Greek economy, particularly following the 2010 debt crisis. This program opened doors for buyers capable of purchasing properties in the Athens city center for €250,000, allowing them to convert these properties into short-term rentals to meet the growing tourism demand. According to data from the Greek Tourism Confederation, tourism in the capital city of Athens is projected to grow by 29% by 2030 compared to 2019.

However, the soaring rents and real estate prices far exceed the purchasing power of the Greek population.

Research indicates that this predicament is leading to severe housing issues, forcing residents and businesses to depart from Athens and paving the way for hundreds of tourism and leisure-centric projects. A study by GBR Consulting found that between 2017 and 2022, 71 hotels were newly opened in the downtown area of Athens.

Balaoura, one of Greece’s most renowned architects and urban planners, highlights in her research that the emerging reality is exacerbating social and spatial inequalities. She states, “In previously traditional commercial districts and communities dominated by small-scale commercial activities and residences, a singular culture of tourism and leisure is becoming emblematic of urban restructuring, resulting in the direct or indirect displacement of residents and users.”

One of Europe’s Last Investment Residency Programs

The European Union approaches the golden visa programs with caution, primarily due to concerns regarding security, money laundering, tax evasion, and corruption. In 2022, EU legislators voted to restrict golden visa programs and urged the European Commission to impose taxes on issued golden visas and conduct stricter background checks on applicants, with all such visas to be abolished by 2025.

European Parliament members stated that the purpose of this measure is to ensure transparency in investments and to ensure that funds genuinely flow into the real economy. Despite the confirmation by the commission that the golden visa programs raise over €3.5 billion annually, they emphasized the controversial ethical, legal, and economic aspects of these programs, which may pose significant security risks. Rapporteur Sophie in ‘t Veld stated that these programs provide a backdoor entry into the European Union for suspicious individuals.

Greece’s golden visa program stands as one of the last investment residency programs in Europe, generating approximately €4.3 billion in revenue for Greece from 2021 to 2023. However, it is destined to gradually fade into obscurity.

References:

Golden Visa: Μέχρι τις 30 Αυγούστου η απόκτηση κατοικίας με τους «παλαιούς» όρους

Greece’s Golden Visa Scheme Blamed for Property Price and Rent Hikes