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Residency permits a bonus for Chinese home buyers

Dafni Korobeli is a Greek lawyer based in Shanghai.

Dafni Korobeli is a Greek lawyer based in Shanghai.

In a bid to jump-start its real estate market, Greece is offering residency permits to foreigners who buy properties in the country. The measure is designed to entice third-country citizens, especially Russian and Chinese investors, to buy homes in Greece. However, at least for the Chinese, the residency permit is a welcome bonus but not their main investment motive, says Dafni Korobeli, a Shanghai-based lawyer and real estate expert, in an interview with gbtimes.

What incentives does Greece offer to foreign investors who buy property in the country?
Law 4146/2013 provides certain benefits to third-country citizens who buy property with a value of at least 250,000 euros. Buyers are offered a five-year residency permit in Greece, which is renewed every 5 years for as long as the property remains in their possession. As a result, they enjoy unrestricted movement within the Schengen area, including the right to stay for up to three months at a time in any other EU member state.

Why would a Chinese investor consider buying Greek property in the first place?
When the Greek law was first issued, it received a lot of publicity in China. The Chinese people have a positive impression of Greece; they value its long history and ancient civilization and they have also come to appreciate it for its natural beauty and tourism potential. Therefore, an investment in Greece appears highly attractive to many Chinese people, especially in combination with the possibility to obtain a residency permit.

Has the law succeeded in attracting Chinese investor interest?
I can only speak based on my experience at KCH, the law firm I represent. We have seen strong interest from both Chinese individuals and real estate agents to buy in Greece. We have received many delegations from China, have already sold a number of properties to Chinese citizens, and have issued the relevant residency permits.

What are the advantages of Greece in comparison to other EU countries, like Spain, that offer similar incentives?
Greece has the advantage of a low investment threshold of only 250,000 euros, compared to 500,000 euros in Spain or Portugal. Furthermore, real estate prices in Greece are much lower, which means that you can buy a comparable property at a fraction of the price. These days, Greek real estate is much cheaper than it was three years ago and this creates great investment opportunities for buyers who wish to lease or resell their property.

From your experience, what kind of properties do Chinese investors look for?
The Chinese are looking for properties located mainly in the greater Athens area. They appreciate proximity to the sea and, if possible, a sea view. They also value proximity to amenities such as supermarkets and stores. Generally speaking, Chinese investors want to get the most they can for the money they spend. They take many factors into consideration, such as the property’s size and the date and quality of its construction.

What kind of Chinese people would consider buying property in Greece?
The people who buy property in Greece tend to belong to China’s upper classes. Many times, they own real estate in other parts of the world: in Europe, the US, Canada, Australia, Hong Kong and, of course, in mainland China. These people see the acquisition of property in Greece as a good investment opportunity. They are also interested in the residency permit, but this is not their primary motive.

There are also real estate agencies that want to buy buildings or apartments in bulk and resell them on the Chinese market. Until now, many of these companies have visited Greece to explore investment opportunities. Chinese real estate agents are very interested in buying a lot of properties in the same building complex. In China, high-rise buildings are the norm. But in Greece, this concept does not exist, as buildings here tend to be much smaller.

From your experience, how do Chinese buyers put their Greek properties to use?
The Chinese buyers who invest in Greek real estate rarely buy properties in order to move to Greece with their families. This option is available but for the time being not very common, the main obstacle being the language barrier. Investors are mostly interested in leasing their property in the Greek market and making a long-term profit. Despite the crisis, some of our Chinese clients have already been able to lease their property and achieve good returns.

How does Greece’s variable tax regime affect potential buyers?
The first thing all Chinese investors ask is what annual expenses their property will incur. Unfortunately we are not in a position to give them a clear answer, since the tax regime is susceptible to frequent changes. In Greece, we should have a clear and transparent tax regime that would ensure stability for all investors. Since the tax legislation in Greece unfortunately changes quite often, I would recommend that we shield foreign investors, at least, from future burdens.

Interview :

October 2014 _Residence_Permits_Guide_EN