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Published on 24 Feb 2023
However, there are still a number of viable opportunities for astute investors, some of which also offer residency.
These are attracting a growing number of international investors; especially emerging markets like Malta, Cyprus and Mauritius which were traditionally undervalued real estate investment destinations but are now becoming hot favourites.
Malta
With its economy no longer largely dependent on tourism to its World Heritage sites, Malta is on its way to becoming one of the strongest real estate industries in Europe.
Underpinning this growth are its stringent banking practices, 85 percent home ownership and major foreign investment which have become pillars of its economy and to add to its attraction is the fact that Malta has been a full Schengen member of the European Union since 2004.
Additionally, its convenient location allows for easy access to the whole of Europe and, with 300 days per year of sunshine, tax efficiency, an English-speaking work force and a wide range of properties from which to choose, it’s no wonder buyers are flocking to the island.
Malta’s citizenship by investment program (Malta IIP) offers naturalisation to foreign investors who show genuine ties to the country by: purchasing or renting of property, investing a minimum of €150,000 in shares, debentures, bonds and other investment vehicles and contributing to National Development & Social Fund.
Cyprus
Since the Cyprus government’s 2014 decision to offer citizenship to foreign property investors, the country has already issued more than 3 500 passports to foreign investors and their families, with property owners reaping significant benefits and buy-to-let investments now accounting for 25% of all property sales.
The requirements and procedure to gain access to one of Europe’s most promising emerging markets are relatively simple and there are two options.
For permanent residency, a minimum property investment of €300 000 is required as well as a fixed deposit investment of €30 000 in a Cyprus bank and, with one of the shortest processing times, residency could be yours in just two months,
For citizenship, minimum property investment of €2 million is required and the application process includes a visit to the island for biometrics with the application for a permanent residence permit taking up to six months to process.
After three years, the initial investment can be reduced to €1.5m provided the investor retains a residential property of at least €500 000 plus vat as their permanent residence.
Like Malta, Cyprus offers accessible entry into Europe, a temperate climate with around 300 days of sunshine a year, a high standard of living and a population that is fluent in English.
Portugal
Portugal launched its ARI/Golden Visa scheme in 2012 and it has since become one of the most popular European property investment schemes.
With minimal residency requirements and a choice of options, investors and their families naturalise for citizenship after six years and tax is only payable if they spend more than 183 days in the country.
You can qualify for Portuguese residency by investing from as little as €280,000 which is one of the lowest investment thresholds in Europe and you don’t have to live in the country; merely spend seven days or longer per year.
You are eligible to apply for Portuguese citizenship in five years, making it one of the quickest in Europe.
Spain
The Spanish Golden Visa or "Property Visa" grants investors automatic residency when they purchase property for €500,000 or more and applicants aren’t restricted to residential property; they can also purchase commercial property, land or a combination of properties.
The Spanish Golden visa also does not require you to be in the country for 183 days of the year like many others, although you do have to visit the country at least once a year and permanent residency will only be granted if you have lived in the country for five years.
Investors also have the options of investing €1 million in Spanish Government Bonds, company shares or private investment funds.
Mauritius
Being so much closer to home, Mauritius is a favourite with South Africans who are not only buying property but also moving their families and companies to the island where an investment of $500 000 or more secures permanent residency.
South Africa now accounts for almost one fifth of foreign direct investment in Mauritius and around 40% of the buyers in property development schemes.
The island’s many draw cards include: social and political stability, a strong and diversified economy, a strong financial services industry and an educated bilingual workforce along with a large pool of skilled and qualified professionals.
Mauritian taxation is also more favourable to both individuals and corporate entities, with a flat tax rate of only 15% and there is also no Capital Gains Tax and Mauritian authorities don’t require any Estate Duty should an owner pass away.
Mauritius has a long list of accolades to its credit, including: The Best Country to Work from in the Region as well as first place in Africa and 25th position overall out of 190 countries on the World Bank’s Ease of Doing Business Report.
The Mauritian government has made investment even easier by introducing a new programme whereby investors can acquire property and gain residency in partnership under the fractional ownership policy.
In other words, two partners who each invest more than $375 000, will not only each obtain a residence permit for themselves, but also their dependents.
The right time to invest
With the Rand beginning to reel from the impact of Eskom’s woes and the fallout from a pandemic and a war, now is time to invest as prices in the most sought-after countries will increase in line with demand and the Rand is unlikely to strengthen for some time.
Lew Geffen Sotheby’s International Realty works closely with our affiliates in these countries to offer local investors the best investment opportunities and guidance.
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