Affluent South Africans exploring Citizenship and Residency by investment in real estate options an ongoing trend
Just voted the third most peaceful country in the world by the Global Peace Index and lauded for its handling of the Covid-19 crisis, Portugal still tops the list of destinations where South Africans seek Residency by investment (RBI) for themselves and their families, says Chris Immelman, who heads up Pam Golding International.
“While Mauritius, with its easy access, and Seychelles remain firm favourites, with the USA and Grenada also attracting their fair share of interest, Portugal, which is also rated the third-safest country on the planet and where English is widely spoken, is also increasingly recognised as one of the most desirable retirement locations with an affordable cost of living and healthcare, and appealing year-round climate, not to mention its beautiful beaches and coastline and excellent educational facilities. Portugal also has no wealth or inheritance tax or tax on overseas pensions, and relatively low tax rates of about 28%.”
Furthermore, says Immelman, and bucking global trends, Portugal’s national airline, TAP, plans to launch new direct flights between Lisbon and Cape Town, with three-weekly long-haul flights starting from 11 November this year (2020), making the country even more accessible.
“Over approximately the past three years we’ve assisted over 350 South African families to enter Portugal’s Golden Visa Programme, which offers residency via investment in property, with early investors already being granted citizenship.
“Notably, despite the dramatic impact of Covid-19 on economies around the world, Lisbon is recognised as one of a handful of prime residential markets expected to achieve price growth during the rest of 2020. This makes Portugal a prime choice for local investors seeking a sound offshore rand hedge amidst South Africa’s ongoing economic recession – particularly post-lockdown.”
The entry level investment in Portugal’s Golden Visa Programme, which provides ease of access to EU countries as well as permanent residency in Portugal after only five years, is just €350 000.
“Not surprisingly, we are seeing an increase in interest in real estate linked residency schemes as South African investors weigh up their options in the current market,” adds Immelman.
“Among South Africans, the demand for countries which offer Citizenship and Residency programmes has remained steady over the last few years. These are mainly families with children up to the age of 23 years, who view it as buying an insurance policy against currency and political risk and to give their children the opportunity to study, work and live internationally.
“Most of our investors – some 80%, are acquiring buy-to-let apartments with good rental yields and capital appreciation prospects abroad. In Mauritius we find about half our investors plan to spend several months a year there as they reach semi-retired status.”
Adds Immelman: “In the USA, since we became involved with the EB-5 Programme just over a year ago, we have helped over 50 South African families facilitate their applications. For any South African seeking a plan B, it makes perfect sense to invest in what arguably remains the world’s best economy. As a result, the Immigrant Investor EB-5 Programme which provides the opportunity to acquire US citizenship via investment in a property venture has come to the fore. It remains the pre-eminent programme to gain lawful and legitimate access to the USA for you and your family to work, live and play there.
“According to our partners in this venture, American Dream, who offer a turnkey service with access to the EB-5 Programme, South Africans are showing increasing interest in what is the quickest way to obtain your US Green Card, with citizenship possible after just five years living in the US. The investment threshold for the programme is $900 000.”
Says Richard Haller, director of Pam Golding Properties Mauritius: “To date we’ve sold some 1 000 units, of which about 700 were to South Africans looking for a strong offshore investment which they can use as they get older, but then also pass down the permanent residency component to their children. Apart from its proximity to South Africa, strong business environment, thriving financial services sector and low tax rates of only about 15%, Mauritius offers an idyllic environment for permanent or leisure use, all of which contributes to an enabling environment for investment.
“Coupled with this, the Mauritius government continues to be exceptionally pro-active and Mauritius is now one of very few countries in the world that are Covid-19 free. Also, it has just recently been announced in the 4th June budget speech, that permanent residency through real-estate will now be accessible from USD375 000. Coupled with this, permanent residency status now includes the right to work, to open a business and even to bring your parents to the island. This is tremendously positive news and we await this to be ratified in parliament in early July.
“Further benefits are that there’s no housing or property tax, no inheritance tax on properties purchased and no capital gains tax, which speaks directly to property investors and home buyers, particularly those looking to relocate for retirement or simply a highly appealing lifestyle in a sought-after international location.”
Over and above these countries, the demand for Grenada in the Caribbean is strong – being the cheapest way to full citizenship at $220 000 per family. Says Immelman: “In Grenada we have assisted 20 odd families with citizenship by investment taking less than nine months and offering visa-free travel to 143 countries, including the EU Schengen area, UK, China, Singapore and Hong Kong. As a result, we see Grenada receiving increasing attention from South Africans, including those seeking an ideal holiday home with sound investment potential plus rental income from a growing tourism base.
“With no need to even visit Grenada during the application process, minimal processing fees and no physical residency required, investors and those looking to acquire second citizenship are finding this a very appealing option.
“Grenada’s CBI programme only requires a minimum investment of US$220 000, with no interview, management experience or qualifications necessary, plus you don’t even have to live there to have citizenship.
“Coupled with this, Grenada has a source-based taxation system, so citizens who are tax resident there are not subject to Grenadian tax on their foreign income, nor do they pay any wealth, gift, inheritance or capital gains tax. And with a year-round tropical climate, pristine beaches and lush landscape, Grenada is an idyllic getaway destination.”
On Eden Island in Seychelles, freehold apartments, maisons and villas to a total value of US$520 million have been sold to date, with people of over 40 nationalities acquiring homes – 25% of whom own more than one property due to the sound capital appreciation and investment returns. Out of the total of 565 units on the island, only nine remain, which are new apartments starting from US$455 000, as all the maisons and villas have been sold. However, some re-sale units are available for purchase – apartments starting from US$400 000, maisons from USS$1.1 million and villas from US$2.9 million. Homeowners qualify to apply for residency in Seychelles.
For further information contact Theresa Fernandez of Pam Golding International: firstname.lastname@example.org.
Posted by The Know - Pam Golding Properties