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Global mobility, financial freedom and family security – these are just some of the reasons why individuals get second passports, with real estate investment being one of the most popular options.
Whilst gaining citizenship to a second country may seem like a rare occurrence, it is a practice that many nationalities must adopt. The second passport is offered by some European countries, such as Spain, Greece, Portugal and Malta, as well as other countries including Turkey, Vanuatu, St. Kitts & Nevis, and several Caribbean nations. Although the structure and duration of these programmes vary between countries, the concept remains the same. The premise is that countries attract investment from foreign high net worth individuals who invest in real estate for a specified period of time and price, and in return, the applicant and their family can receive residency or citizenship for that country, along with the benefits that come with it.
There are multiple different ways to invest in order to secure a passport, including investments into government bonds, setting up a company in the country, or making a one time donation to the host country. However, real estate investment, country dependent, can arguably be the easiest and most economically viable way to secure citizenship.
For several countries in Europe, purchasing a property over a certain value will allow individuals and their families to gain residency within a matter of months, without the need to find a job, enrol in full time education, or set up a company. After maintaining the property investment for a set period of time, applicants can be eligible to apply for settled status, after which they can apply for citizenship of that country. For countries outside of Europe, individuals can invest in a government approved real estate project, which will allow them to gain citizenship within a matter of months.
Other countries allow different forms of real estate investment. Take for example Portugal, whereby as of 2022, to secure Portuguese Residency through real estate investment, investors must purchase a property outside of Lisbon, Porto and the Algarve coast. In the Caribbean, programmes generally require the investment to be in a government approved real estate projects, such as shares in a hotel or resort. Turkey, on the other hand, has a lot more relaxed rules regarding what type of property can be purchased, with the main requirement being that the value exceeds $250,000.
These real estate investments are not only attractive due to the fact real estate can be re-sold, often with a profit due to capital gains, but allows much greater personal and financial freedoms.
Investing in property can allow individuals to optimise tax efficiency. For many countries, the property is classified as a non-reportable asset, which means tax will not have to be paid on it unless you rent or sell the property out. What’s more, if you purchase a property in a tax-friendly country, such as St. Kitts & Nevis, which does not tax worldwide income, inheritance, or capital gains, then you can become a tax-non resident at home, reducing your overall tax burden.
Another great benefit of residency and citizenship through property benefits is the opportunity for much greater global mobility. European residency allows individuals to travel visa-free throughout the Schengen Area, giving access to 26 nations. What’s more, a second passport can allow visa free access to over 180 countries either visa free or visa on arrival. As such, purchasing a property does not just allow you the option to live or stay in a second country, but is a key to travelling the world, freely and easily.
Whilst obtaining great freedom over your financial future and global mobility and both great bonuses to purchasing real estate, you can’t put a price on family security.
At a time where there are numerous conflicts in the middle-east, and worldwide economic uncertainty due to the Covid-19 pandemic, more and more families are looking for a ‘Plan B’. Becoming a resident or a citizen in a second country allows you and your family the option to live in a much more politically or economically stable country.
Real estate has always been an attractive investment option, but with more countries trying to incentivise foreign investors, citizenship and residency by investment programmes open the doors to individuals and their families a whole new world of opportunities. For more information about how you can invest in real estate to gain a second passport, contact one of our advisors for a free assessment.