There is a big debate in Cyprus over the pros and cons of the Golden Visa scheme geared at encouraging non-EU nationals to invest in the country’s property market. If you are looking to sell your property in Cyprus fast , you should probably pay attention to what’s going on. We bring you all the details.
The Golden Visa program originally offered Cyprus citizenship to all foreigners who invested €5 million in the country and purchased properties worth €500,000 at least. Since then, the requirements for the investment have been reduced to €2 million, but those aspiring for Cypriot citizenship still have to buy properties worth €500,000.
So far the scheme has been very successful, bringing in over €3.5 billion in foreign investment. It has certainly eased some of the liquidity pressures on the Cyprus government.
The Cypriot passport is popular as it allows those who hold it a chance to travel to 146 countries in the world without having to apply for a visa. Those who hold a Cyprus passport can travel at will to any of the EU member states. That explains why there is so much demand for it.
There are however fears in some quarters that the so-called citizenship-for-sale scheme, as the Golden Visa program is popularly referred to as, might cause a sudden drop in property prices later, as the foreign investors might choose to sell their properties 2 or 3 years after receiving their citizenship.
The scheme has sparked massive real estate development in Cyprus. There are large apartment complexes that have come up in the country over the last 2 or 3 years, created specifically to cater to the demands of the non-EU investors eager to access Cypriot citizenship.
However, the worry is, that over 50 percent of the foreign investors might sell out in three years’ time, thus driving down property prices in the country.
The problem seems to be that the Golden Visa scheme has distorted the property market in Cyprus, with many high-end luxury homes and apartments being built specifically to satisfy the demand for properties worth €500,000 and above.
Many foreign investors have purchased such properties only for the purpose of getting a Golden Visa. It is more than likely that they do not intend to stay in them and plan to sell them at discounted prices in a few years’ time and downgrade to smaller homes or apartments.
While there is nothing wrong with that per se, real estate experts in Cyprus say that that might lead to a property collapse in the country in a few year’s time. That could have disastrous consequences for the economy still recovering from the aftermath of the 2009 recession.
Not everyone agrees with this view though. Akis Kyradjis, vice-president at financial advisory Arton Capital, said that the fears were overblown in an interview with the Sunday Mail. He says, “It is important to have in mind that the people in question are high net-worth individuals with multiple home ownerships. In the event that they decide to sell and the price offered to them is below what they paid or expect, they will simply not sell.”
And so the debate on the Golden Visa rages on in Cyprus. Selling Property in Cyprus