Wealthy South Africans look to buy property in Cyprus and Portugal as a way to be granted EU citizenship
The Republic of Cyprus has joined countries such as Portugal in attracting the attention of wealthy South Africans looking to buy property abroad as a means to gain European Union citizenship.
The primary aim of such buyers is to enable their children to gain ease of access to study and work abroad, and travel freely in Europe.
This move also assists future generations in their families, says Chris Immelman, managing director Pam Golding International.
He says an offshore investment in a stable country is an ideal way to diversify a property portfolio, and the island of Cyprus in the Mediterranean offers considerable opportunities to accomplish this.
For an investment of R2 million (about R29.9m), buyers can acquire full EU citizenship for their families in four to six months.
Immelman says there is also the opportunity to disinvest after three years by selling the property, provided an amount of R500000 is reinvested into the country.
A Cypriot passport also allows visa-free travel to 159 countries, including Singapore, Hong Kong, Canada and the UK.
“However, according to Expat Insider 2017, Portugal still offers the best quality of life on the planet, with beautiful surrounds, friendly people, good food, as well as excellent healthcare and world-class universities, making the transition to life there even easier.
“We continue to see a huge uptake in property in Portugal, with South Africans riding the wave of property buyers in Lisbon, where they enjoy significant growth in the value of their portfolios as the property market is booming, with demand significantly outweighing supply.”
To benefit from Portugal’s Golden Visa Programme with the opportunity to qualify for residency, Immelman says foreign buyers MUST invest a minimum of R500 000. Permanent residency is achievable in year six and citizenship in year seven.
Portugal has relatively low tax rates of about 20% and no wealth or inheritance tax or tax on overseas pensions.
George Radford, director for Africa at IP Global, also believes Lisbon has what it takes to attract investors: “Lisbon has a vibrant economy and was voted one of the safest places to live.”
He says there is growing demand for accommodation for Lisbon’s middle class, which is good for investors as it shows that demand outstrips supply.
But investors need to ensure there is long-term domestic demand for rental units and easy access to public transport. A buy-to-let investment property should offer tenants the ease of having short commutes to get to work and lifestyle amenities.
“Investors must also keep an eye on the potential increase in a country’s interest rate that could impact a homeowner’s net monthly returns,” Radford says.
He says IP Global is also targeting cities in the US with young populations and industries, such as Minneapolis and Atlanta.