by admin According to government information, checks on Golden Visa program investors have recently been carried out by relevant state agencies. Investigations are conducted both at central and regional level for cases of Golden Visas that were granted to foreign investors from third countries, focusing primarily on Athens and other areas.
Golden tricks and the Golden Visas
In his article, published on October 7, 2020 (“Golden businesses with the Golden Visa – How the dexterous profit the most: the trick with real estate renovations”), the president of the Pan-Hellenic Real Estate Network E-Real Estates, Themistoklis Bakas, described on iefimerida.gr the ‘golden tricks’ devised in recent years by dexterous people who target exclusively the Golden Visa program (The article in included on this website).
Renovations in properties of unusually low value
Among these tricks, companies tend to bu properties of much lower value compared to their supposed market value, then, they carry out a small renovation and resell the property to their (Chinese) compatriots for the 250,000 euros, This specific amount is standard and has been set by the government as the investment limit for granting a five-year renewable residence permit to third-country nationals. Also, many foreign investors, in the last four years, have purchased two or three properties with a total value of 250,000 euros, in areas where short-term rentals were in great demand. Their investment was supposed to have a guaranteed to a significant profit return (e.g. 1,000€/month), at least according to what they were promised by the brokerage companies or agencies that mediated for the property purchase.
High rents through self-owned management companies
The next thing these companies ‘invented’ in order to make their offered properties more attractive to foreign investors, was to buy properties of low market value, renovate them, lease them to their own-interest management companies at a much higher rent than the usual rents of such areas, and then present these as “investment opportunities” for Chinese buyers, who would pay a minimum of 250,000 euros. Still, the golden businesses does not stop here: Greek real estate market professionals have recorded cases in which brokerage companies, in collaboration with property agents in China, and also Greek agents who operate in China and know local procedures, became the shareholding partners of the foreign buyers themselves.
It is necessary to take measures and tighten the legal framework
Mr. Bakas states that it is necessary (for the state) to take measures regarding the Golden Visa program and proposes to check the value of the properties which are bought by foreign individuals in order to claim residence permit as investors. “Such sales in the midst of a pandemic, when the real estate market is on hold, distort the prices of respective areas and once again create fictitious real estate values. In all these transactions, profit is often generated as the result of cheating against the legislative framework”, emphasises the president of the E-Real Estates network and calls for state measures so that investments are carried out with transparency and legal control. On a previous article in iefimerida.gr, the Deputy Minister of Development, Nikos Papathanasis, announced the formation of a special committee to investigate complaints and tighten the legal framework of the Golden Visa program. The ministry considered changes that would put an end to real estate overpricing, stop activities that damage the country’s reputation abroad, and distort the domestic real estate market and property prices. Such interventions would relate to the control of the net value of the property, in which the foreign individual wishes to invest and then apply for a residence permit. In this context, the ministry considers that proof of the amount of 250,000 euros, which has been paid based on the specifications set by the law, is not sufficient for granting a residence permit. Instead there will be an audit against the commercial value of the property, cross-referencing the purchase amount, so that there are no cases where a property with an objective value of 45,000 euros ends up being sold for 270,000 euros. Such complaints have been forwarded by the E-Real Estates network.
Chinese, Turks and Russians in the first three places of investment interest
The Golden Visa program grants residence permit with the acquisition of any property with a minimum value of 250,000 euros. This Golden Visa program has added to the domestic real estate market 1,035 property purchases in 2021, 938 in 2020, 3,535 in 2019, 1,833 in 2018, 959 in 2017, 488 in 2016, 421 in 2015, 338 in 2014 and 21 in 2013, which was the first year of implementation of the program. If this number also includes the members of the investors’ families who were granted residence permits, we are looking at a total of 28,773 residence permits until December 2021. The data of the Ministry of Immigration and Asylum up until the end of 2021 shows that 66.44% (6,391) of the investors who received residence permit with a minimum investment of 250,000 euros in real estate are Chinese nationals; only 6.43 % (619 investors) are Turkish nationals, occupying 2nd place; and 6.22% (599 investors) are Russian nationals, occupying 3rd place.
Source: Eleni Chantzoglou, 19/7/2022