Where in Europe wealthy South Africans are buying property

 ·14 Aug 2020

Whether it’s a growing concern about the SA economy, the desire to move funds offshore, or simply the desire to become a global citizen and enjoy visa-free travel, a significant number of wealthy South Africans are investing in property internationally, often with a view to obtaining residency or citizenship in a foreign country, and currently it appears that Europe is their preferred choice.

According to migration experts Sable International, the hottest emerging destinations for South African investors at the moment, are Portugal, Malta and Montenegro.

“The usual grounds for acquiring citizenship are birth in a country, descent from a citizen parent, marriage to a citizen, or naturalisation, but if you are unable to gain a second passport through the traditional routes, citizenship-by-investment through property, offers an excellent alternative,” said Andrew Rissik, director at investment and migration firm, Sable International.

“Most buyers are looking for a solid offshore property investment, that offers them either residency or citizenship and easy access to Europe. Some are moving there straight away, but others are looking for easier investment terms that only require them to visit the country for a couple of days a year.”

Attractive tax incentives are also high on the list of priorities for South African investors and the three countries all offer great tax perks to property investors. At 9%, Montenegro has one of the lowest personal income tax rates in the world, said Rissik.

Portugal’s Non-Habitual Residence (NHR) programme has attracted foreign investment to the country by offering attractive tax benefits to incentivise expats to consider relocating to Portugal either for their retirement or to establish a base to run their international businesses from.

The programme offers a 10-year tax break on qualifying foreign income – including private pensions and company dividends, Sable said.

In Malta, the Global Residence Programme offers a special tax status, with a flat tax rate of 15% being charged on foreign income remitted to Malta. Highly qualified individuals taking up highly skilled employment positions may also benefit from a flat tax rate of 15%.

This year, in spite of the corona Pandemic, Rissik says that business has been brisk. “While all countries have been hammered by the worldwide lockdowns, certain countries such as SA have made irrational and economically destructive regulations, coupled with the fact that there is no trust between taxpayers and the ruling elite who have now secured loans from the likes of the IMF.

“People are scared. The Plan B trend that we have seen over the past 10 years is fast becoming a Plan A conversation,” Rissik said.


“Portugal’s Golden Visa has been around for a while, but we are seeing a strong increase in enquiries,” said Rissik. The visa requires investors to purchase a property, or multiple properties, with a minimum value of €500,000 or to invest in specific real estate options to a minimum value of €350,000.

“South Africans love the fact that the investment allows them to live and work in Portugal, which also gives you visa-free travel throughout the European Schengen Area. After five years, they can qualify for permanent residence and potentially citizenship thereafter.”

Rissik said that as a property investment, Portugal has been showing solid returns for over 5 years. “The broad range of fundamentals that underpin and drive the Portuguese property market still exist. With the Covid impact taken into account, in Q1 & Q2/2020 we have seen an adjustment in the prices of some overvalued properties.

“Correctly priced properties are selling well,and we still see good demand. Covid-19 is now accelerating this process of adjustment.

“In some areas, I don’t think that we will experience a significant drop in the prices. We are starting to see more flexible payment conditions on new development contracts, and we can already find one or two private owned properties priced well under market value because their owners have lost their income or found themselves in a difficult financial situation with the Covid lockdowns.

“However, we believe that in our segment of the market, this second case will be the exception, not the rule.”


He said that while Montenegro might be small, it has a lot to offer, with a beautiful landscape overlooking the Adriatic Sea, an outdoor lifestyle, quaint villages, and friendly locals who are really welcoming to foreigners.

“From a financial perspective, Montenegro is poised to join the European Union and anyone buying property now is likely to see massive gains if the country is accepted into the EU. Covid-19 aside, Montenegro has been listed a trending tourism destination and is strongly business- investment focused.

“Property investments offer a direct path to citizenship.”

For the Montenegro citizenship-by-investment programme, applicants are required to invest in approved real estate projects within the country. The benefits of investing in Montenegro include the ability to live work or study in Montenegro and visa-free travel to more than 120 countries, Rissik said.


Sable pointed out that Malta offers an attractive citizenship-by-investment programme to the top end of the market.

Investing in Malta Property to a minimum value of €320,000 can grant EU citizenship within 13 months and visa-free access to 182 countries including the UK and US.

Their Malta Residence and Visa Program (MRVP) offers non-Maltese persons the possibility of acquiring an EU residence card that offers visa-free travel within Europe’s Schengen Area.

Rissik said the Malta market is solid. “Pre-Covid 19 there was strong demand for housing in Malta that resulted in an upward trend in property prices. While some signs of overvaluation started to emerge, this can be attributed to fundamentals such as, strong immigration flows, rising disposable income, portfolio re-balancing towards property investment and a delayed supply response.

“Other factors such as the first-time home-buyer stamp duty relief, the reduced tax rate on rental income, strengthening demand for tourist accommodation and, for the high-end segment, the Malta Individual Investor programme (MIIP) may also have played a role.

“Since Covid-19 we have not yet seen the significant changes that many were expecting,” he said.

The reason for this is due to a combination of factors, one being the construction sector did not halt operations, and it was one of the few sectors that was allowed to continue operating.

“In most countries the stats offices have been closed so the true impact has yet to be fully understood. Time will tell what the true effect of COVID-19 will be on the offshore real estate markets but we are expecting a very slight overall change in favour of buyers.

“When advising a family on the best suited programme and investment, we consider which country and property is best for them to invest in in terms of their specific needs, finances and goals, and we plan a possible exit strategy to ensure that they will have a safe and secure full return on investment,” Rissik said.

Should one wait to send funds offshore to invest in property, the rand seems so weak right now?

Sable said that the rand is very undervalued.

“Simply because more people are selling rands than people buying rands, we have just recently been downgraded by all three ratings agencies and are now in real junk bond territory. Billions of rands have left our shores as we were ejected from the MSCI World Government bond Index at the end of April.

“Until the Covid effect settles down, as an emerging market and a commodity economy, we will see downward pressure on the rand. Never wait to invest offshore, get advice and make offshore hedging part of your strategy and then allow yourself time to try and get a good average rate of exchange when sending funds offshore,” Rissik said.

Read: The reality of disposable income in South Africa – we’re getting poorer

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