EU tightens regulations on real estate investment schemes
KUWAIT CITY, April 15: The allure of real estate investment schemes in the European Union, particularly through the offering of residence permits and tax benefits, has long attracted wealthy buyers. However, recent shifts in policy, largely influenced by changes in leftist governments, are tightening regulations on these golden visas, posing challenges for potential investors, reports Al-Qabas daily.
Over the past decade, real estate investment schemes aimed at attracting wealthy investors from outside the EU have been instrumental in boosting housing markets. Yet, the pandemic-era boom, coupled with these investment schemes, has led to significant increases in house prices in some regions, sparking discontent among local residents.
Spain, following the lead of Portugal and other countries, recently announced limitations on its Golden Visa program. Originally introduced to address a surplus of unsold properties after the real estate collapse, the scheme failed to meet expectations due to bureaucratic hurdles and relatively high entry costs. Despite efforts to streamline the process, uptake remained minimal compared to property purchases by British buyers alone.
Official data indicates that only a fraction of real estate transactions in Spain have been utilized for obtaining golden visas, prompting the decision to end the scheme, primarily driven by political considerations rather than economic factors.
Similarly, Greece has revised its golden visa program to address housing supply pressures, raising investment thresholds in certain areas. Opposition parties advocate for its abolition, citing concerns over short-term rentals and housing affordability.
The aftermath of Brexit has seen increased interest from UK buyers seeking to extend their stay through visa regimes. However, tighter measures and the closure of golden visa programs across Europe may pose challenges for prospective buyers.
While these schemes inject capital into local economies and stimulate development, concerns over corruption, tax evasion, and money laundering persist. In response, countries like Montenegro and Cyprus have closed citizenship-byinvestment programs or restricted liberal rules to comply with EU standards.