With Greece’s Residency by Investment programme seeming currently on hold but with plans to continue post-pandemic, and the Greek government looking to boost its struggling economy, the country has announced an attractive flat income tax rate of 7% for overseas retirees, in an attempt to woo foreign pensioners to its stunning shores to live out their retirement.
Since 2014, when Greece launched its Residency by Investment programme (aka Golden Visa), the country has been encouraging foreign investment to its shores with the aim of boosting its struggling economy. Its lucrative residency investment programme, which appears to have come to a standstill and is rumoured to be re-launched post-pandemic, has issued 7,903 residency permits in the last seven years, according to Migration Policy Ministry data.
However, with the programme doing very little during the pandemic (only 368 residency permits issued in 2020 to date, compared to 3,428 in 2019), and with CBI programme re-evaluations underway, the Greek government is looking to secure investment in other ways.
Wooing baby boomers to its shores with tax incentives
In August, the country announced a flat income tax rate of 7% for overseas foreigners wishing to move their tax residency to Greece and reside in Greece. Such a legal change provides eligible pensioners all over the world with a very appealing reason to retire in Greece, and subsequently invest in the country.
Athina Kalyva, head of tax policy at the Greek finance ministry, says the logic is very simple. “We want pensioners to relocate here,” she says. “We have a beautiful country, a very good climate, so why not? We hope that pensioners benefiting from this attractive rate will spend most of their time in Greece, that would mean investing a bit – renting or buying a home.”
The amendment, which was passed in parliament in August, states that individuals who are beneficiaries of an overseas pension income and want to transfer their tax residency to Greece, are subject to an alternative method of taxation for that income, as long as they are from a country which has a double taxation treaty with Greece.
Chief tax and legal adviser at Eurofast, Maria Sarantopoulou, says that if the taxpayer is accepted to be included in the alternative way of taxation for income arising abroad, then the individual shall pay, once-off, a tax at a rate of 7% on the total of their income obtained abroad, each year. This works for a period of 10 years.
“With the payment of this tax in Greece, every tax liability of the individual for this income arising abroad is considered to be paid in full,” she explains.
This tax incentive is timely considering the onset of Brexit and the impact of the coronavirus pandemic, with pensioners perhaps wanting to escape the UK and other countries hard-hit by the Covid-19 and/or disillusioned with their country politics. It also rivals those tax incentives of other EU countries such as Portugal and Malta.
This attractive amendment comes several months after Greece introduced an alternative tax regime that allows HNWIs to pay a fixed tax of €100,000 in a year, irrespective of the total income earned overseas, as long as they invest at least €500,000 in real estate or business in Greece.
Greece Residency by Investment Programme
Launched in 2014, Greece’s Residency by Investment programme (aka Golden Visa Programme) offers overseas HNWIs a definite, though long, route to citizenship. Investors are required to invest a minimum of €250,000 in real estate property (they can alternatively invest more in alternative investments, including government bonds, corporate shares or bonds) in order to receive a residency permit, which is renewable every five years. While the residency permit doesn’t require investors to reside in Greece, it does require them to maintain their investment for seven years, after which citizenship is granted.
Greek citizenship offers plenty of plus points, including visa-free travel to 184 countries with the ability to live, work and study in the EU. This residency route is also applicable to the investor’s entire family, including the children of both the applicant and spouse. Residency is quick, taking a few months to process, and Greece offers a high quality of living but with a low cost of living, one of the lowest in Europe in fact. There are 10 investment options to choose from.
While the programme is currently on hold due to the pandemic, it is expected to return post-Covid with a new and improved format. To find out more about Greece’s Residency by Investment Programme in its current form, read the country profile by clicking here.