Why do states need property buyers from other countries?
When a foreigner acquires real estate in a country, he actually becomes an investor. Such investments are beneficial to the state, because the inflow of foreign capital supports the country's economic development. Some states not only welcome, but also encourage investment in real estate. This applies to Malta, Cyprus and other countries of the Southern Mediterranean and the Caribbean, which offer owners simplified immigration conditions. Why are they doing this? On the one hand, these countries experience economic difficulties associated with a lack of production, high unemployment, economic emigration of youth and, in some cases, underdeveloped economy, and therefore they need additional investment. On the other hand, they convert their intangible resources into profit, which real estate buyers from other countries value so much: a warm mild climate, access to the sea and, as a result, the potential for the development of the tourism business.
Where to look for property abroad
You may use some aggregators for search of property abroad. For example, Realting, covering about 30 countries within Europe, CIS, South Asia, Africa, Middle East, Oceania, and the Caribbean, and similar.
Real Estate Agencies
Name | Experto IG | Pafilia | AWAY REALTY | Avangard | ImmoTrading GmbH | DEM GROUP | Bennecke | Premiumazur | Evans | IL Globo |
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Founded | 2013 | 1977 | 2005 | 2005 | 2012 | 2008 | 1988 | 2012 | 1991 | n/a |
Country | Multi | Greece | Multi | Spain | Multi | Germany | Spain | Multi | Multi | Italy |
Real estate sale | + + | + | + | + | + | + | + | + | + | + |
Real estate rent | + + | + | + | + | + | + | + | + | + | + |
Custom construction | - | + | + | + | - | + | - | + | + | - |
After-sales service | - | + | + | + | - | + | + | + | + | + |
Registration of a residence permit | + | + | + | + | + | + + | - | + | + | - |
Citizenship registration | + + | + | + | + | + | + | - | + | + | - |
Real estate appraisal | - | - | + | + | + | + | + | + | + | + + |
Mortgage | + + | + | + | + | + | + | + | + | + | + |
Registration of a business | - | + | + | + | + | + | - | - | + | - |
Insurance | - | + | + | + | + | + | - | + | + | + |
Banking services | + | + | + | + | + | + | - | + | + | + |
Buying a house by the sea in a warm country, that is the picture almost everyone imagined. Meanwhile, buying real estate abroad can be not just a pleasant fantasy, but a means of achieving specific goals, such as:
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Immigration. You can move permanently or while you work or study. You can also buy real estate for a family, come to a foreign house on vacation or leave it as a “backup plan” for all occasions;
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Obtaining a residence permit/citizenship. Not necessarily for immigration purposes — citizenship of certain countries can give you the right to visa-free access to most countries of the world.
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Getting a passive income. Investing in real estate can bring dividends, because a house or apartment can be rented out. In addition to residential real estate, you can also purchase a commercial property that will generate passive income;
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Profit from the resale. Purchased real estate can be sold for more if it grows in price, or once you renovate it.
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Saving value. In some cases, investing in real estate will help to save money from inflation.
Best countries for buying property
Country | Value USD per m2[1][2] | VAT | Transfer fee | Tax per year | Inheritance tax | Taxes, region | Duty |
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Malta | 1,968 USD | 0% | 0% | 0% | 0% | - | 5%[3] |
Cyprus | 1,523 USD | 19% | 3–8% | 0% | 0% | - | 21,765 USD[4] |
Bulgaria | 779 USD | 20% | 0.1-3% | 0.1-0.45% | 0-6.6% | - | 0%[5][6] |
Spain | 2,073 USD | 21% | 6% | 1.3% | 7.65–34% | 0.2–2.5% | 0.5–2.5%[7] |
Montenegro | 1,169 USD | 21% | 3% | 0.25–1% | 0–3% | - | 0%[8] |
Thailand | 1,784 USD | 7% | 3% | 12.5% | 0-10% | - | 0.1%[9] |
Portugal | 1,618 USD | 0% | 5-10% | 0.3-7.5% | 0-10% | - | [10] |
Italy | 2,352 USD | 0–22% | | 0–4.36%+ | 0–8% | 0.7–4.23% | [11] |
Greece | 1,436 USD | 24% | 3.09% | 0–1,15% | 0–40% | 0.025–0.035% | 3.6%[12][13] |
Turkey | 578 USD | 0–18% | 3% | 0.1–0.6% | 1–30% | - | 0.189–0.948%[14][15][16] |
United Arab Emirates | 2,131 USD | 5% | 4% | - | 0% | 5-10% | - |
The data is subject to change
Real estate in the UAE is popular among investors, as it offers favorable conditions for its acquisition. Thus, the demand for rental of residential real estate is constantly increasing among tourists and local residents, so the owner can rent it out for short or long term. The most expensive tax when buying is the registration fee, which is 4%. Unlike other countries, in the UAE, there is no real estate tax and property income tax.
Compare the prices per square meter of real estate in different countries here.
Buying real estate for passive income
Real estate abroad can be leased for short or long term. Before buying, you need to decide on the target audience, find out the type and amount of demand for rental housing. For example, a house by the sea can be in demand by vacationers in the warm season for both short and long periods. Income from real estate is taxed in the country of purchase — you must consider all possible fees in advance. Of course, a deal with a tenant must be concluded in accordance with the laws of the country. In addition, income from real estate and banking operations abroad may need to be declared at home: for example, it is required from tax residents in Russia. Whether one has to pay income tax not only in the country of purchase, but also at home, depends on the size of the tax abroad and the country itself: for example, to avoid double taxation, some countries have agreements with one another to avoid such issues.
Comparison of countries for a rental property
Country | Income per year[17] | City | Income Tax per 1,088 USD/month | Income tax per 8,706 USD/month |
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Montenegro | 7.53% | Coastal areas | 9% | 9%[18] |
Portugal | 5.45% | Lisbon | 28% | 28%[10] |
Thailand | 5.13% | Bangkok | 10% | 30%[9] |
Bulgaria | 5.12% | Sofia | 10% | 10%[19] |
Cyprus | 4 , 74% | Limassol | 0% | 35%[20] |
Spain | 4% | Madrid | 19–21% | 19-23%[7] |
Greece | 3.97% | Athens | 15% | 45%[12] |
Italy | 3.92% | Rome | 23% | 43%[21] |
Malta | 3.37% | Valletta | 20% | 35%[22] |
Turkey | 1.93% | Istanbul | 15% | 35%[14] |
The data is subject to change
Resale of foreign real estate
You can earn money by reselling your real estate if prices rise. The disadvantage of this type of real estate investment is that the market and the reaction of buyers are not always predictable, as they depend on many conditions. For example, real estate prices may unexpectedly fall, and then the investor will lose part of the invested money, and continued price increases can cause a sharp drop in demand for real estate — there will be nobody to buy it. In this case, the seller of real estate should be prepared to face a number of fees both in the country of sale (tax on the increase in the value of real estate, transfer of ownership, registration and other fees depending on the country) and with taxes at home. In a word — this method of investing does not guarantee income and is associated with many risks. In order not to get into a mess, before buying you need to get acquainted not only with the state and trends of the national real estate market, but also consider possible development scenarios taking into account the maximum number of factors, such as:
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Dynamics of real estate prices;
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Inflation rate;
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Dynamics and volume of demand for real estate;
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Type of demand for housing (housing purchase or rental);
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The pace of development;
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The amount of taxes and fees at home and abroad associated with the resale of real estate;
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Other factors.
Taxes for the sale of real estate in different countries
Country | Tax | Comment |
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Malta | 8% | Single Tax. In some exceptional cases, the amount may vary from 2 to 10%[23] |
Montenegro | 9% | Flat tax[18] |
Bulgaria | 10% | Flat tax[19] |
Greece | 15% | Flat tax[24] |
Cyprus | 20% | Flat tax[4] |
Spain | 19-23% | 19% — up to 6,530 USD, 21% — from 6,530 USD to 54,413 USD, 23% — from 54,413 USD[7] |
Italy | 0–43% | 0% — real estate that has been owned for more than 5 years or which was the main place of residence of the owner, 23% — up to 16,324 USD, 27% — from 16,325 USD to 30,471 USD, 38% — from 30,472 USD to 59,854 USD, 41% — from 55001 to 81,619 USD[11] |
Portugal | 28% | Flat tax[10] |
Turkey | 0–35% | 0% — real estate, which was owned for more than 5 years, 15% — up to 2,674 USD, 20% from 2674 to 6,142 USD, and 27% — from 6142 to 14,452 USD, 35% — from 14,452 USD[25] |
Thailand | 0-35% | 0% — up to 4,729 USD, 5% — from 4729 to 9,458 USD, 10% — from 9458 to 15,764 USD, 15% — from 15764 to 23,645 USD, 20% — from 23645 to 31,527 USD, 25% — from 31527 to 63,054 USD, 30% — from 63054 to 157,635 USD, 35% — from 157,635 USD[26] |
The data is subject to change
Buying real estate as a way to protect your money
Real estate investments do not always generate income, but can be used as a way to store value. Buying a house, for example, can be a more reliable investment than investing in stocks: their value is conditional, and real estate is a real property, the cost and value of which are less susceptible to changes in the economic situation. Investing in real estate will help protect funds from inflation if rising real estate prices outrun inflation in a selected country. Buying real estate abroad is especially good if the storage of funds in your home country is risky or unprofitable due to the unstable or unfavorable financial situation. The disadvantage of this method is that the situation on the market may change, for example, if inflation begins to grow, which will "eat up" part of the invested funds. It is necessary to know the economic situation in the country of purchase, as well as the scenarios of its development, and not to invest all funds in a single object, so as not to jeopardize your entire wealth.
Buying a property to obtain a residence permit/citizenship
States offer their residence permit or citizenship to those who are willing to invest in local real estate. This type of immigration is often referred to as a "golden visa". Additional requirements for the buyer of real estate may be the absence of a criminal record and the registration of medical insurance. In some cases, the holder of the investment must spend several months per year in the country, not to withdraw investments from the country for several years and have a stable income of a certain size.
Southern European countries are the best option for this type of immigration due to the level of economic development, geographical proximity, the possibility of visa-free travel to many countries[27], the acquisition of an EU passport, favorable conditions for acquiring residence permits or citizenship, and a warm climate.
The best countries for obtaining a residence permit through real estate
Country | Type of investment | Investment |
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Greece | Purchase of real estate | 272,063 USD[28] |
Portugal | Investment in the restoration of a real estate that was built more than 30 years ago or which is located in a district that needs reconstruction. | 380,889 USD |
Portugal | Purchase of real estate | 544,127 USD[29] |
Spain | Purchase of real estate | 544,127 USD[30] |
Cyprus | Purchase of real estate | 326,476 USD[31] |
Latvia | Purchase of real estate | 272,063 USD |
Best countries for obtaining citizenship through real estate
Country | Type of investment | Investment |
Malta | Five-year lease agreement for real estate in Malta | 87,060 USD |
Malta | Purchase of real estate | 380,889 USD[32] |
Cyprus | Purchase of real estate | 2,339,745 USD[31] |
Antigua and Barbuda | Purchase of real estate | 400,000 USD[33] |
Saint Kitts and Nevis | Purchase of real estate | 200,000 USD[34] |
Dominica | Purchase of real estate | 200,000 USD[35] |
Turkey | Purchase of real estate | 250,000 USD |
Turkey | Buying Shares at Real Estate Investment Fund | 500,000 USD[36] |
The data is subject to change