European Real Estate Rules For Overseas Investors
News Posted On: 05 December 2012
Visa policies have been identified as the best option by European countries such as Spain and Portugal in their efforts to lure real estate investors from overseas. While home prices are increasing all over the world, the Eurozone is still finding it hard to get out of the real estate slump. Since properties in Europe can be purchased for affordable prices, foreign investors were expected to make the most of these opportunities. However, this wasn’t the case, and many failed attempts to attract investment have led the Iberian nations to believe that granting permanent or temporary visas to investors might just do the trick.
Cyprus emerging as the front-runner
Cyprus, a nation which wasn’t even considered by many investors, has now established itself as the main candidate to attract investors thanks to the visa policy. It is the only country in Europe that offers investors with permanent visas on purchase of real estate worth over 300,000 euros, unlike other nations where investors are granted just residency rights. The idea of gaining resident visas in Europe appeals to a large number of investors as people who have always dreamed of making the move to Europe are now stepping up their pursuit of European properties.
Increase in real estate sales
An executive committee member of the Chamber of Industry and Commerce of Cyprus, Georgios Leptos said that prospective migrants will have to wait for only thirty to fifty days before they get their visas approved. Cyprus, with a population of just under 900,000 has managed to sell over 65,000 real estate assets to overseas investors since 2000. The government of Spain is also considering the grant of residency to overseas investors who purchase a home within its borders, worth more than 160,000 euros. Jamie Garcia-Legaz, the Secretary of the Commerce Ministry announced the plan in November 2012. It is currently awaiting approval, and Garcia-Legaz revealed that the plan was aimed primarily at investors from outside the Eurozone.
Reasons for the failure of the plan
Portugal has also taken the same route as foreign investors who purchase property in the country can attain a residency visa if the property if worth over 500,000 euros. The influence of the plan on foreign buyers is evident considering the rise of immigrants this year. However, these nations had expected a far superior influx of investment. Most buyers are cautious as they believe that the resources for higher education and job opportunities aren’t as great in these countries as those in North America.
Portugal, Spain and Cyprus have been dealing with the worldwide financial crisis for almost five years now. This has had a serious effect on their real estate markets, leaving their banks with bad deeds and mortgages. While the residency visa policies offer a glimmer of hope, buyers aren’t as excited as they were expected to be. The houses on offer are located mainly in less inhabitable and desolate suburbs, and this is a major turn-off for potential suitors.
Written by Les Calvert
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