Hello,
As every month, we bring you the hottest real estate news from around the world.
This month we want to draw your attention to:
A. Expected changes to the golden visa in Greece
B. Expected changes to taxation in Romania that will affect micro companies from 1.1.2023.
C. The further 0.75% interest rate hike in the US at the end of September 2022, which is also expected to affect the real estate market.
We recommend examining your preparation for the tax changes taking effect at the start of 2023, and the readiness of companies in the target countries for 2023.
Happy holiday and enjoyable reading,
Ilan Leibovitch, Adv., and the office team
Deloitte's annual report on real estate prices in Europe
As every year, the consulting and accounting firm Deloitte has published its report reviewing real estate prices in 23 European countries - the Deloitte Property Index 2022.
The report shows that a Romanian would need to save about 6 years of the average gross salary to buy a 70 sq.m. apartment, compared with about 10 years for a Hungarian.
According to the report, apartment prices in Bucharest stand at about 1,573 euro/sq.m., compared with 2,566 euro/sq.m. in Budapest and 1,262 euro/sq.m. in Sofia.
Greece doubles the investment amount required for a golden visa
In a television interview during his visit to the international fair in Thessaloniki at the beginning of September, Greek Prime Minister Kyriakos Mitsotakis announced that the investment amount required for a golden visa will double, from 250,000 euro to 500,000 euro. The effective date has not yet been announced.
Apartment prices in Greece continued to rise in Q3
The Greek website Spitogatos, which tracks apartment prices in Greece, points to a continued rise in apartment prices in Q3 2022 compared with the corresponding quarter in 2021.
Tax changes in Romania from 1.1.2023
Micro companies - a company whose 2022 revenues exceed 500,000 euro as of 31.12.2022 will not be able to continue operating as a micro company and paying 1% of revenues, and will have to pay 16% of profits. In addition, a micro company will be able to continue paying 1% of revenues provided it has at least one full-time salaried employee (paid at least the minimum wage of 2,550 lei/month, on which taxes and social contributions of 1,100 lei/month must be paid).
Consulting payments and management fees - from 1 January 2023, a company whose total income from consulting and management fees exceeds 20% will be required to pay 16% corporate tax.
Dividend tax - will rise from 1 January 2023 from 5% to 8%.
Decline in the number of units sold in Romania over the summer
In June-August 2022 the number of units sold in Romania fell by 14.5% compared with the corresponding period in 2021 (42,154 apartments were sold in total in this period), while in Bucharest the decline in the number of apartments sold was small (12,900 this year compared with 13,700 in the corresponding period last year).
Romania is considering buying the “Iron Dome” from Israel
During a visit by the Romanian foreign minister, Vasile Dincu, to Israel in September, advanced contacts were reported between the two countries on the purchase of the “Iron Dome” system by the Romanian army. Romania would thereby become the first European Union country to buy the system (so far Finland, Slovakia and the Czech Republic have bought only the radar).
Ukraine's economy - should we be worried
In an opinion article, Pavlo Kukhta, former Minister of Economic Development, Trade and Agriculture of Ukraine, argues that the war of attrition against Russia will be decided to a large extent on the economic front as well. According to the article, Ukraine's GDP contracted by 19% in the first quarter of 2022 and by 37% in the second quarter, inflation reached almost 20% in August, and the state budget is running a monthly deficit of about 5 billion dollars, financed mainly by foreign aid and partly by printing money. The writer notes the recovery of grain exports thanks to the grain corridor agreement, and warns of damage to energy and heating infrastructure in the winter.
Source: Kyiv Post, Pavlo Kukhta
The real estate situation in Ukraine - an inside view
I have known Guy Perat for more than 15 years. In the past decade Guy moved to Kyiv and works in real estate there, and from time to time we talk and consult each other. I turned to him to hear a little about what is happening in the city half a year into the war with Russia.
“There are many opportunities in the city's secondary market today, with most transactions carried out by locals at an average drop of about 30% in dollar value. And it is important for me to stress that the value of the Ukrainian hryvnia has been significantly devalued since February.
“The primary market, and purchases from developers, work completely differently. Here I actually see developers raising prices but failing to sell. Developers' price cuts were made mainly to generate cash flow for the project. Most developers cannot finance continued construction from equity over time.” he says.
“Because the situation in Kyiv has been calm in recent months, many Ukrainians are flocking to the city, and housing demand has risen. Rental prices have returned to 80% of their value in hryvnia compared with prices on the eve of the war.” he adds.
So as someone living the real estate market in Kyiv, what would you suggest to Israelis today? I asked.
“I think that in the secondary market you can find low prices today and get decent rental income. Within a year or two I believe real estate prices will start rising again.” he replied.
Accurate as of the issue date. Laws, tax rates and procedures change; check the current position before any decision.
Translated from the Hebrew original. עברית