Golden Visas and Golden Passports

Liz Alderman‘s article titled “Golden Visa Programs, Once a Boon, Lose Their Luster,” just posted in the New York Times.

No joke! We learned all about it at International Living’s recent Fast Track Europe Conference in Portugal comparing five European countries for livability: Portugal, Greece, Spain, Italy and France. Yes, the Golden Visa programs that once attracted wealthy retirees to purchase properties in Portugal, Ireland, Greece and Spain in order to acquire residency will no longer exist because of the negative results it had on housing for their own citizens. It drove up prices, pushing the locals out of the market.

Lisbon, Portugal

Sure, the countries made a ton of money from the foreign investment and handed out thousands of visas, but then created their own problems by not understanding human behavior and long-term consequences. I find this is true of many government administrations which want short term results on which they can get re-elected instead of a solid long-term program.

On top of it all, it doesn’t shed a good light on immigration, and that leads to the election of more populist leaders who are conservative and anti-immigration. Look what happened to the UK and Brexit! None of that benefits us expatriates (aka immigrants).

Greece

France didn’t offer the Golden Visas and as a result lost a lot of potential North American immigrants who were seduced by them. Then, those who were seduced and moved to these countries discovered later that they couldn’t stack up to France. We’re now seeing a lot of them moving to France! And the funny thing is that I was once told by an Immigration Officer that Americans hold THE “Golden Passport” because we’re number one on their list of favorite immigrants.

My opinion: the solution to these problems, to balance the assets and liabilities of such programs, will only come when those in charge are no longer short-sighted (meaning re-election isn’t part of the equation) and when they take the time to research and understand the consequences of their behavior. Instead I see that they are “grabbing at straws” with no real strategy.

Spain

The rise of short-term rentals is a perfect example of this mismanagement. Instead of stepping back to get a broader view of why there is such a boom (the obvious new and growing need for transient housing), the financial benefits of such housing (how that can benefit the investors and how that can in turn benefit the cities and the locals) and how it can be managed to be a win-win for everyone (much like the hotel industry with standards, controls and taxes), the administrators make decisions with tunnel vision.

Cities and countries want and need real estate investment. If an investor can’t recuperate their investment and make enough of a profit, they won’t invest there. They’ll find other viable revenue resources. And that’s when everyone suffers…as the industry suffers, everyone working in it suffers as well as the upkeep of the property gets forgotten and can turn into a slum.

Italy

Yes, they need to make investment in real estate attractive, and profitable, but at the same time find ways of ensuring investors are responsible landowners that maintain their properties and don’t gouge their tenants. There ARE ways to set the standards and institute controls that would help balance the haves from the have-nots. Balance is the key. It needs to be a win-win for everyone or else is becomes a lose-lose for everyone instead.

In France, anyone can buy property. You don’t have to have a visa and buying property will have nothing to do with your ability to get that visa. Once purchased, how you generate revenues has to do with the laws within that specific commune. I can’t promise that they are intelligent laws, either, because France is trying to fix its own housing shortage and their administrators are no more or less intelligent than the others. This is true worldwide.

But, we can help you through this to determine the ability for a property to generate a decent revenue or not. And there ARE ways, fortunately, to win-win.

If you want to learn more, too, be sure to get on our consultation schedule…that’s where it all begins. Visit our website or email us today.

A la prochaine…