The response to a Greek program in which investors from non-European Union countries who buy property worth at least 250,000 euros in Greece are awarded special visas has been very poor to date, according to an analysis by the Center of Planning and Economic Research (KEPE).
The analysis stresses the failure of the investment incentive program – also known as Golden Visa Greece for offering residence permits to third-country investors – especially when compared with such programs in other EU states.
From June 2013 until October 2015, just 983 such residence permits were issued in Greece. In Latvia, where the same program with a property value threshold of 250,000 euros has been in place since 2010, 13,518 permits were issued in a five-year period (from July 2010 to July 2015) – i.e. an annual rate which is more than six times higher than that of Greece. Portugal, with a threshold of 350,000 euros, issued 6,124 permits from October 2012 to June 2015, and in Spain, where the threshold stands at 500,000 euros (double Greece’s), there were 531 permits issued from September 2013 to December 2014.
KEPE notes in its analysis that out of the 983 Golden Visas issued to third-country property buyers the vast majority went to Chinese and Russian citizens, who were awarded 335 and 315 permits respectively. The other participants in the Greek program are from the United Arab Emirates (151), Egypt (53), Ukraine (52) and the US (21).
The report adds that several of these property purchases were not initially made with the aim of obtaining a Golden Visa, having taken place before the program began, with the application submitted later, after the scheme had started, which points to the fact that the program was even less of a success as an incentive for investment.
The failure of the scheme is attributed to several factors, such as uncertainty about the country’s eurozone membership, the general macroeconomic climate, the political uncertainty and the capital controls. Another discouraging element is the instability of the local tax system.
With such programs increasing internationally, KEPE says Greece has to shift the criterion from property buying to investment in the private economy.