How can a Russian buy real estate in Greece: yes "loophole"

Western sanctions imposed after the start of Russia’s war against Ukraine significantly hampered the outflow of financial resources from Russia and, paradoxically, helped stimulate the Russian economy, noted the famous economist Ruben Enikolopov.

The sanctions did not completely block financial flows, and together they played a role in changing the movement of the ruble, which is obvious in the real estate market. In 2022, Russian property buyers left the European market, heading to the United Arab Emirates (UAE), Turkey or the South Caucasus and even countries in Southeast Asia. After almost two years military operations the direction seems to be changing again.

Türkiye and the UAE are losing their leading positions as investment destinations for Russian property buyers, while other countries, including in Western Europe, are strengthening their positions. At least as far as the trend recorded in market research is concerned.

According to a report by NF Group (until last year it operated in Russia under the brand of the international real estate consulting company Knight Frank), 10 months January-October 2023 Russians focused their requests on purchasing real estate in Hungary and Cyprus instead of last year’s favorites – Turkey and the UAE. According to the results of this survey, Turkey “fell” to third place, followed by Indonesia and Greece rounding out the top five.

The main motivation that prompts 6 out of 10 Russians to buy property abroad is obtaining a residence permit or second citizenship, according to a study by NF Group. Hence the interest in Hungary, which plans to offer residence permits to those who buy property on its territory, six years after allegations of corruption forced authorities to shut down a similar Golden Visa scheme.

The “Guest Investor Program” allows those who invest at least €250,000 in local real estate funds or €500,000 in Hungarian real estate the right to apply for a 10-year renewable residence permit in Hungary, according to legislation introduced by the Prime Minister Viktor Orban. In addition, donations of at least 1 million euros to so-called public funds will be entitled.

Wherein purchases of real estate by Russians in Spain in the first half of this year increased by 50% year on year. 2,137 transactions were completed, according to data from the Center for Notarial Statistical Information.

Although Greece has suspended the issuance of golden visas to citizens of Russia and Belarus, this process can be carried out indirectly. Thus, If interested Russians have or acquire citizenship of a third country (for example, Georgia, Turkey, UAE, Kazakhstan, Uzbekistan, Caribbean countries, etc.), then they can easily obtain a residence permit in Greece.

At the same time there is also Digital Nomads Visa to attract digital nomads to Greece, which allows third-country nationals working in digital technology to enter and stay in Greece.

According to the Ministry of Immigration as of October 2023, Russians with 324 permits rank 6th among the 10 largest nationalities with valid initial permanent investor permits under the Golden Visa program (2.9% rate). The Chinese remain the leader (61.1%), followed by the Turks with 698 permits (6.2% of the total). According to the Bank of Greece, net direct investment from Russia in Greek real estate between 2002 and 2022 amounted to 174 million euros.

Apartment in Athens Area 30 sq.m. + veranda 17 sq.m., 65,000 €

In fact, 2022 recorded a drop of 58.4% compared to 2021: from 24 million euros before the war, inflows fell to 10 million euros with the outbreak of conflicts. However, this figure may not be the actual amount that came into our country, since, as lawyers and real estate agents explain, Russian funds could have originated from another country, e.g. Cyprus, Switzerland etc. The same is with Chinese funds, they note, in addition to the “direct” route, they come through Hong Kong and Singapore. Foreign direct investment amounted to EUR 1.64 billion in the 9th month of 2023.

According to the Bank of Greece, the positive rate of tourism and short-term rentals, as well as increased investment interest from abroad in the purchase of real estate, including under the Golden Visa program, continue to strengthen the dynamics of the domestic real estate market. In particular, foreign direct investment in the real estate market recorded significant growth in the 9th month of 2023 and reached net revenues of 1.644 billion euros, exceeding by 28.7% the corresponding level of receipts recorded in 2022 (1.277 billion euros).

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