Investing in second citizenship or residency abroad is one of the most fruitful ventures any high-net-worth individual (HNWI) can pursue. It unlocks the doors for global travel while simultaneously providing its holder with an elevated investment status.
HNWIs tend to consider obtaining a second citizenship or residency not only for themselves but their family members as well; providing their children with a platform upon which to build their success. This approach means adding as many family members to an application as possible, maximizing the return on investment.
However, with the addition of other family members to an application, the investment, or more accurately, the associated fees could increase. We at Savory & Partners always highlight the exact amount applicants have to consider when choosing their residency or citizenship by investment program, and in tune with that philosophy of transparency, we want to share with you the most important fees and taxes to take into account when budgeting for your application.
What is the nature of the additional fees you need to know about?
Any additional fees are payments alongside the investment, which do not go into the investment itself.
These fees can come in various shapes or sizes, such as taxes, stamp duty, government fees, application processing fees, due diligence fees, or otherwise.
Each residency or citizenship by investment program has its own set of particular fees, many of which coincide with the nation’s tax regime. To understand the nature of these fees better, we will look into some of the most popular residency and citizenship by investment programs in the world.
Residency by investment
Three of the most popular residency by investment programs globally are the Portuguese, Spanish, and Greek golden visas. These pathways require applicants to invest in real estate for a minimum of €280,000, €500,000 or €250,000, respectively. There are, however, other fees associated with each program, and we will dive deeper into both.
Investors wishing to obtain a Portuguese golden visa have a wide array of investment options, ranging from investment funds, capital investments, or the creation of jobs. However, it is the real estate option that achieves the overwhelming majority of applications (over 90%), and the minimum investment threshold for real estate starts at €280,000.
Additional fees within the scope of the Portuguese golden visa come in the shape of taxes, processing fees, as well as residency issuance and renewal fees.
Here is the breakdown of the fees:
- Acquisition taxes – Purchasing real estate in Portugal triggers real estate acquisition tax and stamp duty, both of which are borne by the buyer. Tax rates differ from one area to the next and depend on the property’s value. Real estate acquisition taxes normally range from 5 – 6.5%, although in some cases (in urban areas), they may be exempted. Stamp duty is fixed at 0.8% of the property value.
- Property tax – Real estate owners in Portugal have to pay annual property tax, the tax ranges from 0.3 – 0.45% of the property value depending on the location.
- Processing fees – There is a processing fee of €514.80 for the golden visa, and an additional €80.20 per additional dependent added to the application.
- Golden visa issuance fee – There is a golden visa issuance fee of €5,147.80 for each member of the application.
- Golden visa renewal fee – The golden visa is issued for an initial one year, then it is renewable for two subsequent periods of two years before an applicant can obtain permanent residence or citizenship. The fee to renew a golden visa is €2,573.90 per each member of the application.
It is worth noting that acquiring a property in the €280,000 bracket of the golden visa can significantly lower taxes, as properties eligible at this price are found in rural development areas, which induce low or no taxes.
Much like Portugal, Greece has a golden visa that has a high focus on real estate. For €250,000 an applicant and their eligible family members can obtain a Greek residency, but there are some extra fees in the shape of taxes, application fees, and residency fees.
- Taxes – Greece recently changed its taxation law concerning property. All new (first-hand) properties levied an acquisition tax of 24% of the property value. However, the government temporarily changed this law, and until the end of 2022, all properties will have the same tax that is levied upon older (second-hand) properties, which is 3.09%.
- Application Fees – €2000 for the main applicant and €150 for each additional family member
- Residence issuance fees – €16 per person.
The third EU country with a golden visa scheme, Spain’s investment migration route also focuses on the acquisition of real estate. Investors who purchase a property, or a multitude of properties, for no less than a combined €500,000 can apply for a Spanish residence permit.
The additional fees in terms of the Spanish golden visa are limited to property transfer tax (which depends on the location of the real estate), stamp duty, and the fee for issuing a residence permit. Here is the breakdown of the additional fees for the Spanish golden visa:
- Property transfer tax – This tax is levied depending on the municipality and the area of the property, and, of 2022, it ranges between a minimum of 6.5% to a maximum of 11%.
- Stamp duty – When purchasing a property an investor must pay stamp duties, which range between 0.75-1.5%
- Golden visa permit fee – A fee of €70 per person will be required to issue Spanish golden visa resident permits
The property transfer tax and stamp duty mean that investors should take into consideration an additional fee ranging between 7.25-12.5% of the total property value.
The most popular citizenship by investment programs are clustered in the Caribbean region. All of these programs have a donation option as well as a real estate investment option that allow investors to obtain their citizenship. However, there are some additional fees, especially with real estate options, that one should consider before choosing their preferred investment route. We will take a look at each country and its additional fees below.
Antigua & Barbuda
The twin-island nation of Antigua & Barbuda has three investment options:
- Donation to the National Development Fund (NDF) option starting at US$100,000
- Donation to the University of West Indies (UWI) for a family of six starting at US$150,000
- Real estate option starting at US$200,000
The additional fees in Antigua’s citizenship by investment program are as follows:
- Application fee – US$100
- Processing fee (NDF & Real estate) – US$30,000 for a family of up to four people plus US$15,000 for any additional dependent.
- Processing fee (UWI) – US$15,000 for any additional dependent after the sixth family member
- Passport fee – US$300 for each member
- Due diligence fee – US$7,500 for each of the main applicant and spouse, as well as US$4,000 for each dependent above 18 years of age, and US$2,000 for each dependent between the age of 12-17.
Dominica is home to the second oldest citizenship by investment program in the world, having launched its version in 1993.
The Dominican government provides applicants with two investment options: donation or real estate. Both have additional fees attached to them as follows:
- Stamp duty – The buyer of real estate in Dominica must pay a stamp duty of 4%
- Processing fees – US$1,000
- Due diligence fees – US$7,500 for the main applicant and US$4,000 for additional dependent above the age of 16
- Certificate of naturalization – US$250 per person
- Expedited passport fee – US$1,200 per person
As for the real estate option, the applicant will have to pay additional government fees as follows:
- US$25,000 for a single applicant
- US$35,000 for a family of up to four people, including the main applicant and up to three dependents other than a dependent sibling
- US$50,000 for a family of up to six people, including the main applicant and up to five dependents other than a dependent sibling
- US$70,000 for a family of seven people or more, including the main applicant and at least six dependents other than a dependent sibling
- US$50,000 for a sibling of the main applicant or of the spouse of the main applicant aged 18-25
- US$25,000 for a sibling of the main applicant or of the spouse of the main applicant below the age of 18
The island of Grenada offers two investment options to applicants, buying real estate and donating to a government fund. Both come with additional fees, but much like Dominica only the real estate option comes with government fees. Here is a breakdown of the fees:
- Real estate acquisition tax – 10% of the property value
- Processing fee – US$1,500 per person
- Application fee – US$1,500 per person
- Due diligence fee – US$7,500 for the main applicant and US$5,000 for any dependent above 17 years of age
- Government fee (for real estate only) – US$50,000 for a family up to three, and an extra US$25,000 per each additional dependent afterwards
- Passport fee – US$250 per person
Home to the oldest citizenship by investment program, St. Kitts & Nevis has been perfecting its program since 1984 and currently has two investment options: donation or real estate investment.
Both options come with additional fees, but, like the other programs, the real estate option also requires extra government fees. The breakdown is as follows.
- License to obtain land – Foreigners who wish to purchase property in St. Kitts & Nevis must obtain a special certificate to do so. This certificate requires a payment of 10% of the property’s value.
- Property tax rate – There is an annual property tax of 0.002% for residential property and 0.003% for commercial property.
- Processing and due diligence fees – Applicants must pay US$7,500 for the main applicant and US$4,000 for each dependent aged 16 years or older.
- Government fees (for real estate only) – these fees are paid for the real estate option as follows:
- Main applicant: US$35,050
- Spouse of the main applicant: US$20,050
- Any other qualified dependent of the main applicant regardless of age: US$10,050
The island nation offers three routes of investment:
- Donation to a government bond
- Real estate option
- Government bond option
The real estate also has an extra government fee, which is not applicable in other options. The breakdown is as follows:
- Property transfer tax – A flat rate of 10% is paid in property transfer tax
- Due diligence – A fee of US$7,500 for the main applicant and US$5,000 for any dependent above 16 years of age.
- Processing fee – US$2,000 for the main applicant US$1,000 for each dependent
- Real estate government fees are paid as follows:
- Applicant applying alone – US$30,000
- Applicant applying with spouse – US$45,000
- Each qualifying dependent (18 years of age and over) – US$10,000
- Each qualifying dependent (under 18 years of age) – US$5,000
- Applicant applying with spouse and more than four qualifying dependents – US$10,000 each
Turkey’s citizenship by investment program has various investment options, the majority require investments in securities or long-term deposits for half a million dollars, but the most popular option is investing in real estate for US$250,000. However, while all investment options require applicants to pay residence permit and passport issuance fees, only the real estate option requires a property transfer tax. Here are the additional fees to keep in mind:
- Residence permit fee: ₺160 per person
- Passport issuance fee: ₺1,270 per person
- Citizenship certificate fee: ₺30 per person
- Property transfer tax (for real estate): 4%, however, half is paid by the buyer and half by the seller, so the applicant shall only bear 2% in taxes
There is also the matter of military service, as male children below 18 years may be required to serve in the military once they finish school. However, this requirement can be waived for a payment of ₺31,000 (as of 2022), which can be paid in installments as well.
Budgeting your investment
At Savory & Partners we take pride in providing transparent, comprehensive consultations to our clients. Our experts will help you budget your investment and avoid any unwelcome surprises. All you need to do is contact us today for a comprehensive consultation.