How will Hungary’s new Golden Visa program compare to its legacy competitors in 2024?
No place is perfect, and hence no Golden Visa program is perfect, either.
Yet the all-new Hungarian Golden Visa, which is set to start accepting applications around March of 2024, is shaping up to be a highly interesting option.
For starters, the program comes in competitively priced — at only €250,000 for the real estate fund option.
(You can also buy a property for €500,000, or make a non-refundable donation of €1MM to a Public Trust.
The government is yet to clarify which properties (and where) will qualify under the €500K track, but it’s pretty likely that the program’s sweet spot will be the €250K option.
Whilst RE investment funds frequently charge subscription fees, they’re nowhere near the cost of transfers costs on properties.
(In Spain, for example, on a €500,000 qualifying residential property, you’re looking at around 10%+ top-side, so at LEAST €50,000 in sunk costs.)
And unlike with buying an actual property, there’s no maintenance and management costs with a RE fund investment, so the overall cost of “ownership” tends to be lower.
The new Hungarian program will also feature a zero-day minimum stay requirement, which is on a par with Greece and Spain (and beats Portugal, which, on average, requires you to spend at least one week per year there).
But are you eventually going to bag a Hungarian passport through their Golden Visa program, like many people have done in Portugal?
Highly unlikely — even just learning Hungarian, which is a requirement for naturalization, is notoriously difficult.
(Hungarian belongs to the Uralic language family, a group of languages primarily spoken in Eastern and Northern Europe.)
So no eventual Hungarian passport.
But here’s the thing…
The Hungarian Golden Visa will boast a 10-year residency permit validity — which is double that of its closest competitor, Greece. And it’s renewable for an additional ten years — even after you sell the asset.
I wanted to get clarity on this, so I reached out to an industry insider who is very close to the new program’s development.
He confirmed this detail — the residency permit will be renewable for an additional 10 years — but the minimum hold period on the investment is just 5 years!
That means that you invest for 5 years, and then benefit from 20 years’ Golden Visa residency status — hence you’ll be paying for 5 years, and getting 20.
That’s frankly unprecedented in the industry, and about as close to getting permanent residency as you can get without actually getting PR.
Could you get permanent residency in Malta or Cyprus to rival this long permit validity perk?
Sure you could — but if you opt to rent in Malta (the cheapest option) — you’re looking at a sunk cost of around €150,000.
And if you buy a property, you’re in for at least €300,000 ex transfer costs, plus a €40,000 processing fee and a €28,000 government contribution — so you do the math.
Now if you were to buy commercial property in Cyprus you could avoid the VAT bill (standard rate of 19%) you’d get with a new residential property… but then you’d still need a fixed address in Cyprus (hence more sunk costs / capital outlay).
Plus, until you become a citizen of Cyprus, you won’t benefit from visa-free travel across the Schengen Area.
And in Greece, you’d need to hang onto your property until you naturalize — in addition to having to speak Greek — so there, too, you won’t get something for nothing…
A LOT of clients I speak with are adamant that they’re not interested in Golden Visas that don’t offer a clear path to citizenship (as Portugal does - on paper, at least).
But by the scars on my own back (and those of countless Portuguese GV applicants now going into their second, or even third year of processing limbo there), you are going to need hair on your teeth to deal with the Portuguese immigration authorities.
I had lunch today with a couple who bought a GV property in Portugal BEFORE Covid, and are yet to secure a residency appointment for the primary applicant, despite taking numerous legal steps to compel SEF (now AIMA) to cooperate.
And from first-hand experience — and as someone with a penchant for languages — learning Portuguese is a LOT harder than learning Spanish, even though they’re quite similar.
So realistically, you’re not going to get your Portuguese passport with a todo bem here and a muito obrigado there.
(Moreover, Portugal, in recent years, has been putting a lot more emphasis on “real world ties” — including in-country stays — than most Golden Visa consultants might tell you.)
And their leftwing government appears hellbent on destroying the program’s credibility and reputation, even if they can’t quite afford to kill it off entirely.
Hence I would think long and hard before I chose Portugal’s Golden Visa in 2024…
So essentially, the days of getting EU citizenship via Golden Visa investment without spending significant time on the ground are over.
And with every passing year, the remaining program options dwindle, and get more expensive.
The investment migration programs of Ireland and the UK got killed off virtually overnight. Montenegro buckled under EU pressure; as did Albania. Greece’s most popular areas got more expensive. And Portugal no longer allows any property investment.
And then, just in time for Christmas, recent media reports indicate that Turkey is about to become 50% more expensive, too. (Their property option’s pricing is purportedly set to jump from $400,000 to $600,000 in early 2024.)
So in launching a new Golden Visa program, Hungary is very much bucking the trend.
Will their program be perfect?
Most likely not — but nor are the programs of Spain (predatory taxes), Portugal (bureaucratic omnishambles), and Cyprus (no Schengen Area visa-free travel until citizenship stage).
So against this backdrop, the Hungarian program might be well worth a look in 2024.
As I often tell clients, if you don’t fancy a country, you’re probably not the target market: Hungary is massively popular among Chinese nationals looking at Plan B and Plan A options, however Western applicants typically tend to favor the Southern European options.
Also, in years past, many North Americans prospects expressed scepticism regarding Turkiye — and yet their CBI program has become one of the top-selling programs in the world today.
(It has also become more popular among Westerners over time.)
But as any investment migration practitioner could attest, too many people keep on window-shopping, never getting out of the research phase — and then another program bites the dust.
There are hordes of families around the globe still kicking themselves for not applying for the US EB5 Visa while it was still priced at $500,000…
Or that they didn’t buy a second home in Porto for €350,000 whilst that was still an option…
Make sure this kind of regret doesn’t become yours in 2024.
Have you had an excellent — or disastrous — experience applying for a Golden Visa?
Feel free to share your story in the comments.
Until next time — because you deserve to have options.
Andre
PS: The above information is not investment advice, and should be treated as purely informational in nature.
