Tax and Visa Havens in the EU

With Britain scheduled to leave the EU following the Brexit vote, many overseas property investors are looking for locations that can offer beneficial tax regimes and a route to an EU visa. Here we look at a few.

Greece

The lowest cost of European residency and an EU visa can be found in Greece.

Greece’s ‘golden visa’ programme grants EU residency, including free travel around the European Union, for a real estate investment of over €250,000, with no requirement to stay in the country for an extended period of time.

Furthermore, if the property is then sold to another non-EU citizen, the Greek residency transfers over to the new investor.

Rental income is taxed at between 11 per cent and 33 per cent. Capital gains taxed at 15 per cent, and property is taxed annually from 0.2 to one per cent of the property’s value.

Portugal

Arguably the most successful of the ‘golden visa’ programmes, Portugal offers EU residency for a real estate purchase of €500,000 or more.

You only need to be resident in Portugal for 7 days in the first year, then 14 days in the subsequent two-year periods.

Stamp duty is calculated at 0.8 per cent on the value of the contract exchanged or the value of the house, whichever is the greater.

Malta

Another destination gaining popularity because of its tax regime is Malta.

Although foreign nationals are taxed on income from work sourced in Malta, the island has no wealth, inheritance, capital gains or annual property taxes.

Overseas property investors can purchase a second home if the value exceeds €107,670 for apartments and €179,400 for houses and stamp duty is also set at five per cent.

Both individuals and families can gain full EU citizenship if they invest at least €1.15 million in the country. However, they must have been resident in Malta for at least a year before being granted citizenship.

Spain

As in Portugal, foreign investors can gain family residency with full EU citizenship from a property investment of €500,000.

The residency must be renewed every two years, but becomes permanent after five years. After ten years the occupier no longer needs to live in Spain to retain the visa.

EU/EEA residents pay 19 per cent tax on rental income, while everyone else pays 24 per cent.

Italy

Italy doesn’t have a ‘golden visa’ programme for overseas property investors, but permanent residency can be gained by demonstrating an annual income of €100,000, which is reduced to €35,000 after a large property investment.

Capital Gains tax is 20 per cent if selling properties within five years of purchase, while gross rental income after expenses is taxed at 15 per cent.

Tax relief of 24 per cent is permitted for renovating old buildings, but approval must be gained from the local Italian tax office first.

Stamp duty on second homes is nine per cent.

The Italian government introduced a new non-dom tax regime this year with a flat rate on foreign income.

Whichever country you choose to invest in, you can expect a beneficial tax regime, EU citizenship, and a lot better weather than the UK.