Greece Tightens Rule on Golden Visa Scheme to Address Housing Crisis

Greece Tightens Rule on Golden Visa Scheme to Address Housing Crisis

Greece is making updates to its popular Golden Visa program that grants residency to foreign investors. The goal is to address the country’s housing shortage by discouraging real estate purchases solely for short-term rentals.

The government plans to raise minimum investment thresholds and prohibit Golden Visa properties from being listed on platforms like Airbnb.

Increased minimum investment amounts for popular areas

To prevent people from buying property solely to make a profit and drive up housing prices, Greece plans to drastically increase required investment levels in its most desirable locales.

The minimum Golden Visa investment amount will rise to:

  • €800,000 in Athens, Thessaloniki, Mykonos, Santorini, and islands with over 3,100 inhabitants

  • €400,000 in all other regions

Presently, the lower €250,000 threshold is in effect for all areas except central Athens, northern and southern suburbs, Thessaloniki municipality, Mykonos, and Santorini.

A focus on long-term housing stock

However, hiked minimums are just one part of the overhaul. Equally important, Golden Visa properties will be prohibited from short-term rental use entirely.

This new regulation addresses a problem where certain investors were buying big properties just to split them into smaller units for short-term rentals, often advertised on platforms like Airbnb.

The government’s goal is to boost the availability of long-term rental options for Greek locals by preventing Golden Visas from fueling the growth of holiday properties.

New 120-square meter minimum property size

An additional provision stops foreign investors from buying smaller residential units that are typically more suitable for Greek residents.

All Golden Visa properties must be at least 120 square meters going forward. This prevents “micro” investments in compact studio or one-bedroom flats — housing stock better suited for local housing needs.

The minimum size creates a separation between domestic demand and foreign investment requirements. It sets aside smaller properties for Greek residents while also permitting foreign investment in the real estate market.

Incentives for historic building restorations

In well-known neighborhoods where property prices are higher, the government has decided to stick with the initial requirement of investing at least €250,000 in historic buildings.

This encourages people to renovate old or abandoned buildings, breathing new life into classic architecture. There are also extra tax breaks available for covering the costs of restoration, making these projects even more appealing.

These steps aim to find a middle ground: they encourage investment while also boosting the supply of good, long-lasting housing and bringing energy back into neighborhoods.

Reactions from real estate industry

Some real estate professionals worry the changes, especially ultra-high minimums in prime markets, could dampen investment enthusiasm from abroad.

With other European Union (EU) nations offering lower residency investment thresholds, there are concerns that Greece’s heightened requirements could make it uncompetitive for global capital.

Yet, the Finance Ministry argued that these changes strike a balance between addressing housing demands and maintaining foreign investment, which are both crucial economic goals.

Greece’s lucrative Golden Visa program

Although the real estate industry in Greece may face challenges, the Golden Visa program has been very effective in attracting foreign investors to buy property.

From just 2021 through 2023, the program drove over €4.3 billion in international investments into the Greek economy. Nearly 15,000 applications were submitted in that span.

The Hellenic Republic has become a popular choice for international investors looking to obtain residency rights within the EU by making investments in property.

Chinese citizens were the most prominent group of international buyers, followed by increasing interest from the United Kingdom and Middle Eastern countries.

Greece’s policy balancing act on immigration

Greece is walking a tightrope with its new Golden Visa rules.

The country wants investment from wealthy immigrants to boost its economy. However, lawmakers must also think about making housing affordable for Greek people.

Greece wants to make sure there are enough homes for people to live in by limiting short-term rental investments that are only done for quick profit.

At the same time, they want to encourage foreign investors to put money into restoring old buildings by offering them incentives like fewer restrictions.

This update to Greece’s immigration policy shows how they are balancing different goals, like growing the economy and making life better for people who already live there.

Government balancing economic priorities

In revamping its Golden Visa program, the Greek government carefully balanced different pressures and economic needs.

They aimed to attract rich foreign investors while also addressing the housing shortage and rising rental prices affecting Greek people.

The changes in the program are designed to channel investment into projects that will increase the availability of housing in the long run, while still allowing foreign money to flow into the real estate market.

Whether the revised scheme strikes that balance remains to be seen as it takes effect in the coming months.