Greece: Golden visa only for properties over 120 sq. m.

The "golden visa" program in Greece will be changed to target a much smaller number of investors. According to reliable information, the changes will be numerous and significant.

First, in the regions of Athens and Thessaloniki and all islands with a population of more than 3,000 people, the minimum investment will be increased to 800,000 euros. Today the limit is 500,000 euros only in the center of Athens, in the north and south suburbs, in the municipality of Thessaloniki and on the islands of Mykonos and Santorini. Thus, regions such as Euboea, Crete and all popular island destinations will have a maximum threshold of €800,000. In the rest of the country, the limit will also be increased to €400,000 from the existing €250,000. This is intended to prevent demand from being concentrated in a few locations, leading to dramatic increases in real estate prices. The only cases where the €250,000 limit will apply are retained properties and buildings to encourage investors to make such purchases and to revitalize many as yet unused properties.

In addition, purchases will now only be possible for properties of 120 square meters or more. Investors will be prohibited from using properties through short-term rental platforms. The changes in the program are aimed at closing the windows for use through short-term rentals.

In statements, National Economy and Finance Minister Costas Hatzidakis indicated that the amendment will be presented this week. "The government already intervened in Airbnb last December. The real estate market rose as expected. Golden Visa related transactions account for 7% of the total. So we will turn to more touristy places under the golden visa and increase the limit to €800,000, and in other areas the limit will be increased to €400,000."

The new conditions for the "golden visa" will come into force in October.

This change is expected for the second consecutive year and will cause serious distortions in the real estate market, as it will launch a new "panic" among investors to be able to take advantage of the new deadlines for changes. More pressure will be exerted in areas where the €250,000 limit is still in force, especially within Athens, which is already noticeable from 2023. A total of 4,231 new licenses were issued last year, an increase of almost 100% from 2022. There are still 7,596 applications pending, which is of course due to overloaded services. On average, about 2,000-2,500 licenses were issued each year before the program changes.

It is important to note that according to the Spitogatos Property Index, in the second quarter of 2023, i.e. before the introduction of the recent changes to the golden visa status, the average asking price in the center of Athens was €1,885/sqm. After the limit was doubled to €500,000, the average price rose to €2,000/sqm in the third quarter and to €2,037/sqm in the fourth quarter of 2023. There was no price decrease and the same applies, of course, to rental prices.

According to Potamianos, "the problem with high prices, which have also stalled real estate transactions in the center of Athens, is due to a shortage of supply, as there are hundreds of thousands of unavailable properties that are in the hands of indebted households and heirs who cannot use them, or are under the control of banks and claims management companies." He says that "the problem was not the 'golden visa' as the number of transactions was small."

Specifically, in 10 years about 20,000 properties have been acquired by foreign investors from non-resident countries, most of which are used through long-term leases.

Risvas notes that the new changes proposed in the Greek program are not based on real data, but are purely a political decision. In addition, they will lead to the complete withdrawal of most investors due to the high cost, as other countries such as Cyprus and Spain will offer more competitive prices (310,000 and 500,000 euros respectively).

The new conditions for the "golden visa" will come into force in October. An official announcement of the new measures is expected to be made shortly, but they will not be put into effect immediately.

The thinking of the Ministry of Economy is to allow a period until September 30 to enter into preliminary and private agreements for the purchase of real estate through which the eligibility for a residence permit will be recorded. Participants would then be given until the spring of 2025 to finalize the signing of the relevant purchase agreements and apply for a residence permit.