Monthly brief - March 2026

Hello everyone!

Although Operation “Lion's Roar” began at the end of the month, the security tension was felt throughout the month in Israel. The stagnation in sales offices, the Governor leaving the interest rate at 4%, the security tension and the strengthening of the shekel against the dollar - all of these led to continued heightened interest among Israeli investors in real estate overseas (last week official data were published showing a 15% rise in purchases by Israelis in Cyprus).

This month we would like to draw your attention to:

A. Greece: tighter restrictions on short-term rentals and structural changes in the “Golden Visa” program.

B. Romania at a crossroads: between a technical recession and the battle over the 2026 budget.

C. Bulgaria: a new currency, old problems - a deadlock on the road to a budget.

D. Cyprus: the real estate market - moderate price rises and stable yields.

E. Portugal: real estate tax changes in housing.

F. The end of the era of anonymity in real estate purchases in the USA.

Adv. Ilan Leibovitch and the office team

Greece

Tighter restrictions on short-term rentals and structural changes in the “Golden Visa” program

The Greek real estate market is undergoing a dramatic change these days, as the Greek government works to implement a series of strict regulatory measures intended to fight the local housing crisis and reduce the number of apartments used for tourism in high-demand hubs.

The ban on short-term rental of “Golden Visa” properties

One of the most central restrictions derives from Law 5100/2024, which categorically prohibits renting out properties purchased for the purpose of obtaining a “Golden Visa” under the “sharing economy” model (such as the Airbnb and Booking platforms).

The ban applies to any property purchased under the new investment regime that took effect on April 5, 2024, or properties purchased under the transitional routes and used for the first issuance or renewal of a residence permit under the provisions of the updated law. Investors who purchased their properties and completed the visa procedures under the old regime (before April 2024) generally enjoy “grandfather clause” protection and are entitled to continue operating their properties as short-term rentals, but they must make sure that no changes were made to the visa status that require compliance with the new law. A violation of this restriction constitutes a serious administrative offense, entailing a fixed fine of 50,000 euros, alongside immediate cancellation of the residence permit of the property owner and his family members.

The freeze on AMA licenses and the non-transferability of licenses

Beyond the visa restrictions, there have been substantive changes in the management of AMA licenses (the registration number required for short-term rental). As of 2026, the license is personal and linked to the property owner and is not “attached” to the property itself. This means that when a property is sold, the existing license expires automatically, and the new buyer is required to submit an independent licensing application. This issue becomes especially critical in “Saturated Zones” in central Athens, where the government imposed a complete freeze on the issuance of new AMA licenses until December 31, 2026.

Geographic restrictions and enforcement hubs

The freeze on new licenses applies to the three central municipal districts of Athens (Districts 1, 2, 3), which include, among others, the most sought-after neighborhoods: Koukaki, Plaka, Psyri, Monastiraki, as well as the areas of Thiseio, Petralona and Kolonaki. In these areas, even if the property was used for short-term rental in the past, a new buyer will not be able to obtain a license to operate it under this model, which directly affects the property's marketability and its yield potential.

From the writer's desk:

For the Israeli investor, the new rules require a re-examination of investment and property management strategies, since failure to comply may lead to heavy fines and even loss of residency status.

We recommend that our clients who manage properties in Greece or are considering a new purchase carry out an extended due diligence that is not satisfied with the ownership status alone, but also examines the feasibility of operational licensing under the updated maps. These changes mark the Greek real estate market's move from a tourism-speculative model to a model of long-term investment in housing, and one should prepare accordingly in building yield forecasts and managing legal risks.

Our media coverage

The most critical mistake of Israeli investors in Greece, Romania or Portugal is the mistaken assumption that local law will protect them the way Israel's “Sale Law” does. In many countries there is no safety net, and the contract you signed is everything - for better or worse

While everyone is running to Greece, the real “bonanza” is currently in Bucharest. The combination of yields of 8.5% and local bank leverage of 70% is an enormous financial advantage for smart investors.

Say goodbye to the “Wild West” of real estate in Romania: after the ‘Nordis’ affair that shook the market, the rules of the game are changing fundamentally in favor of absolute legal certainty.

Romania

Romania real estate prices summary 2025

Romania at a crossroads: between a technical recession and the battle over the 2026 budget

Romania's economy faces one of the most challenging months in years. A combination of disappointing growth figures, stubborn inflation and political struggles over the division of the budget pie are redefining the economic forecasts for the coming year.

The economy enters a “technical recession”

The main news that made waves in the capital market and the business community arrived in mid-February with the publication of data from the National Institute of Statistics (INS). Romania's economy contracted by 1.9% in the fourth quarter of 2025. Since this is the second consecutive quarter of negative growth, Romania was officially declared to be in a technical recession.

The slowdown stems mainly from a sharp drop in private consumption, Romania's main growth engine over the past decade, and from the erosion of household purchasing power. Following the data, leading financial institutions such as ING and the EBRD hurried to revise their annual growth forecasts for 2026 downward, to a conservative level of under 1.2%.

The drama around the state budget

Alongside the growth data, the political arena in Bucharest stormed around the approval of the 2026 budget. The government, headed by Ilie Bolojan, tried to navigate between the European Union's demands for fiscal restraint and domestic political pressures.

• The deficit target: the government set an ambitious target of lowering the deficit to 6.2% (compared with almost 8% in the past year).
• The bone of contention: the “solidarity package” proposed by the Social Democratic Party (PSD) was at the center of the discussions. Critics argue that increasing benefits and subsidies during a recession could deepen the budget hole, while its supporters argue that this is the only step that will prevent social collapse under annual inflation of about 9.7%.

The PNRR funds: the last lifeline?

Economic analysts are unanimous: the key to getting out of the crisis lies in Romania's ability to draw down the funds of the European Recovery and Resilience Plan (PNRR). February was marked by concern over delays in legislation related to special pensions, which endangers the flow of hundreds of millions of euros. Without massive investment in infrastructure and green energy financed by the Union, the move from a technical recession to renewed growth looks further away than ever.

Bulgaria

A new currency, old problems - a deadlock on the road to a budget

While in the streets of Sofia and Plovdiv people celebrated in early February the euro becoming the only legal tender, in the corridors of power the atmosphere is much less festive. February 2026 marks the peak of a political-budgetary crisis that is putting to the test the stability of the youngest Balkan economy in the eurozone.

Gyurov's caretaker government

After the previous government resigned at the end of 2025, a caretaker government headed by Andrey Gyurov took office. The main task of Gyurov and his finance minister was supposed to be technical: to accompany the full transition to the euro. But political reality upset the cards, and the government found itself running a country without an approved budget for 2026.

The budget “tangle”

The economic press in Bulgaria dealt throughout the month with the budgetary “continuity law.” Since the fragmented parliament failed to agree on a new budget framework, the country is operating under a temporary budget, which limits the government's ability to spend money on new projects or on public-sector pay raises.

Key points in the budget confrontation:

• The deficit: the finance minister is urging parliament to approve a conservative budget with a deficit below 3%, to prove to Bulgaria's partners in the eurozone that Sofia is committed to fiscal discipline.
• Stalled investments: the budget delay puts at risk the receipt of funds from the European Recovery Plan (RRF) and from the SAFE programs, which are essential for modernizing Bulgaria's power grid and infrastructure.

Consumer confidence in decline

The political stalemate is also leaving its mark on the ground. Reports published at the end of February point to a sharp drop in Bulgaria's economic confidence index. Analysts explain this by a combination of uncertainty about the new taxes (which are at the center of the dispute in parliament) and the public's natural fear of price rises following the adoption of the euro, a fear that the government struggles to calm without an approved government marketing and public-information budget.

The OECD report for February 2026: the economic road map of Bucharest and Sofia

February provided an in-depth glimpse into the future of the two most dynamic economies in the Balkans, with the publication of the OECD's in-depth reviews. While Romania and Bulgaria are walking different paths, one struggling with a technical recession and the other adapting to the euro, the organization's reports sketch a clear common denominator: the urgent need for structural reforms to prevent long-term stagnation.

Romania: between fiscal contraction and stalled growth engines

The OECD presents Romania with a complex picture. After a contraction of 1.9% in the last quarter of 2025, the organization revises its growth forecast for 2026 to only 1.1% (compared with previous forecasts of over 2%).

• Managing the deficit: the report praises the government's commitment to lowering the fiscal deficit to 6.2% of GDP in 2026, but warns that the tax burden in Romania remains among the lowest in the OECD (about 27% of GDP compared with an average of 34%), which requires widening the tax base and abolishing sectoral exemptions.
• Removing bureaucratic barriers: one of the main emphases in the report is the “Single Industrial License.” The OECD estimates that its full implementation could reduce administrative costs for businesses by 15%-20% and encourage foreign investment that weakened in the last quarter.

Bulgaria: eurozone membership is no substitute for productivity

For Bulgaria, the report presented in February is the first since the adoption of the euro on January 1. The organization forecasts steadier growth of 2.5% in 2026, but points to a “productivity gap” that threatens prosperity in the long term.

• The productivity trap: labor productivity per hour in Bulgaria stands at only about 52% of the OECD average. The organization calls for aggressive reform of the vocational training system, since the shortage of skilled labor is raising real wages faster than output (a 12% rise in the average wage versus 3% in productivity).
• Corruption and governance: Bulgaria is required to strengthen the independence of its regulatory authorities. The OECD notes that improvement in governance indicators could add up to 0.5% to annual GDP growth over the next 5 years.

Comparison of key indicators: OECD forecast for 2026

The OECD reports stress that 2026 is the test year for structural reforms. In Romania, the focus will be on stabilizing the fiscal balance while trying to avoid a deep recession. In Bulgaria, the challenge is to leverage the monetary stability of the euro for a technological and industrial leap forward.

For the business community, the main recommendation arising from the reports is cautious optimism: the macroeconomic fundamentals (especially Bulgaria's low debt and Romania's industrial potential) remain strong, but the success of the projects depends on the governments' ability to implement the OECD's recommendations on digitization and proper administration.

Cyprus

The real estate market: moderate price rises and stable yields

The real estate market in Cyprus continues to demonstrate stability and moderate growth in early 2026 as well. The February 2026 data indicate continued demand for residential properties, alongside a moderate rise in prices and maintenance of yield levels that are stable relative to other European markets. This trend stems, among other things, from the continued activity of foreign investors, infrastructure and tourism development, and the activity of international companies operating on the island.

Data published by the Department of Lands and Surveys in Cyprus indicate that in February 2026 about 1,530 real estate sale transactions were recorded. This continues the trend of lively activity already recorded in January 2026, when similar figures were recorded. Compared with the corresponding period last year, this is a double-digit increase in the number of transactions.

Limassol continues to be the most active market in the country in terms of number of transactions, mainly because of the concentration of international companies and extensive business activity in the city. Paphos and Larnaca follow, continuing to attract many foreign investors, including investors from Israel, Britain and other European Union countries.

Real estate prices

Real estate prices continue to rise at a moderate pace. At the start of 2026 the average price of residential property in Cyprus ranges around 2,500-2,700 euros per sq.m.

However, there are significant gaps between different areas of the country.

In Limassol, the most expensive city in Cyprus, prices of new apartments in modern projects near the coast usually range from 3,500 to 5,500 euros per sq.m., and at times even more in luxury projects.

In Paphos prices are relatively low and usually range between 2,000 and 3,500 euros per sq.m., while in Larnaca properties can be found in the range of 1,800 to 3,000 euros per sq.m., especially in developing areas around the marina and new port projects.

Compared with January 2026 there was a further moderate rise in prices, mainly in new projects in coastal areas. According to local market reviews, the annual rise in real estate prices in Cyprus currently stands at about 3% to 5% on average.

Rental yields

The rental market in Cyprus continues to offer relatively stable yields to investors.

The average gross yield from residential apartments usually ranges from 4% to 6% a year, with the yield varying according to the property's location and type.

In Limassol, because of higher purchase prices, yields are usually about 4%-5%. In Paphos yields are slightly higher and range around 5%-6%, mainly in small apartments intended for rental to tourists or foreign workers. In Larnaca yields of up to about 6%-7% can in some cases be found, especially in small apartments in development areas.

Rental demand is affected, among other things, by the expansion of international companies' activity in Cyprus, mainly in fintech and technology, as well as by the growing number of foreign workers arriving on the island.

Key market trends

Several main factors continue to influence the Cypriot real estate market at the start of 2026.

First, demand from foreign buyers continues to be significant and makes up a large part of the transactions in the market. Cyprus is seen by many investors as a relatively accessible investment destination in terms of prices and taxation compared with other countries in the European Union.

Second, significant infrastructure projects, including the development of the marina and port in Larnaca and the continued development of tourism areas in Limassol and Paphos, are expected to affect real estate prices in nearby areas.

Third, the tax and regulatory environment in Cyprus continues to be relatively friendly to foreign investors, which supports demand for properties.

Portugal

Real estate tax changes in housing

During February 2026 the Portuguese Parliament approved an authorization law for the government to advance a series of tax amendments in housing. It is important to stress: at this stage these are not yet final implementing regulations, but an approval in principle that allows the government to publish, within 180 days, detailed legislation that will define the conditions and the actual implementation.

That is, the direction is clear, but the final details and the actual start of application are expected to be set in government decrees to be published later.

Below are the main expected changes and their meaning:

A reduced VAT of 6% on residential projects

Today the VAT rate in Portugal on construction works is generally 23%. Under the new authorization the government was permitted to set a reduced VAT of only 6% for construction or rehabilitation of properties intended:

• for sale as the buyer's permanent residence
• or for long-term residential rental

The benefit is conditional on the property being sold or rented within a “moderate price” framework, that is, a price or rent that is not entirely free but subject to ceilings to be set by the state.

Property transfer tax (IMT) and relief in residential transactions

IMT is the property purchase tax in Portugal, paid upon transfer of ownership of a property.

The authorization makes it possible to set exemptions or relief on purchase tax and stamp duty in transactions aimed at increasing the supply of housing for residential rental.

Annual property tax (IMI)

IMI is an annual municipal tax on the mere ownership of a property (similar to Israel's annual arnona municipal property tax). The authorization includes the possibility of relief from this tax within dedicated programs to encourage affordable housing.

A reduced tax of 10% on residential rental income

Today, the default tax on rental income for individuals stands at 28%.

The law allows the government to set a reduced rate of only 10% on residential rental income, subject to meeting conditions such as:

• residential rental only (not short tourist rental)
• compliance with a defined rent ceiling
• contract registration and orderly reporting
• a minimum rental period

If implemented, this is a dramatic reduction in the tax burden.

For example: annual rental income of 20,000 euros - the tax may fall from 5,600 euros to only 2,000 euros.

Benefits for companies - partial recognition of income

The authorization includes the possibility that in certain cases only 50% of rental income will be included in a company's tax base. This means an effective tax rate much lower than usual.

This mechanism too is conditional on the publication of detailed regulations.

An exemption from capital gains tax (mas shevach) on sale and reinvestment

An exemption from capital gains tax is being considered on the sale of a residential apartment, where the proceeds are reinvested in purchasing properties that will be allocated for residential rental.

The aim is to encourage a shift of capital into the long-term rental market.

From the writer's desk:

The regulatory direction is clear: Portugal seeks to encourage long-term rental at supervised prices and to reduce incentives for short-term tourist use.

However, most of the benefits are not automatic. They are conditional on a commitment to a certain use of the property and on price ceilings.

Therefore, early legal and fiscal planning becomes critical:

The holding structure (individual/company), the type of contract, the length of the period, pricing and reporting will all affect eligibility for the benefits.

USA

The end of the era of anonymity in US real estate purchases - the RRE Rule comes into force

On March 1, 2026, one of the most significant regulations in the history of the American real estate market came into force: the Residential Real Estate Rule (RRE Rule). This is a permanent federal rule of the Financial Crimes Enforcement Network (FinCEN), replacing the temporary “Geographic Targeting Orders” (GTOs) that had been used over the past decade. From now on, the obligation to report buyers' identity is no longer limited to specific cities such as New York or Miami, but applies across the entire United States in a uniform and binding manner.

The essence of the obligation: transparency in cash transactions

The new rule focuses on residential real estate transactions defined as “non-financed transactions,” that is, transactions carried out in cash or without the involvement of a financial institution subject to the Bank Secrecy Act (BSA) and an anti-money-laundering program. The reporting obligation arises when the property is transferred to a legal entity such as LLCs, corporations, partnerships, or to funds and trusts. The meaning for the Israeli investor operating in the USA is dramatic: the classic legal structure of buying a property under an LLC for legal protection or privacy no longer serves as a barrier against exposing the identity of the beneficial owners to the federal authorities.

The reporting obligation and the identity of the beneficial owners

As part of the reporting (Real Estate Report), the “reporting persons,” usually closing agents, title insurance companies or the lawyers managing the transaction, are required to collect and transmit to FinCEN detailed information on the ultimate beneficiaries of the property. The information includes full names, residential addresses, official identification numbers and a copy of the identity documents of every individual who holds 25% or more of the purchasing entity or has substantial control over it. It is important to stress that the rule exempts purchases made by private individuals in their personal name, and focuses solely on the use of legal entities and trusts, which in the past served as a tool for preserving anonymity.

It is important to clarify the critical legal distinction created by the new rule: the rule does not “pierce the corporate veil.”

• LLC immunity remains intact: the LLC continues to provide the same familiar legal protection. The company's separate legal personality still serves as a buffer protecting the investor's personal assets against tort claims, debts or litigation related to the property.
• Removing the cloak of anonymity toward the sovereign: while the “corporate veil” continues to protect against private creditors, it can no longer serve as a tool for concealing identity from federal government authorities. The new rule requires active disclosure of the beneficial owners as early as the time of purchase.

The target: tax authorities and the fight against money laundering

The reporting obligation is intended to serve two central enforcement arms of the US Treasury:

• Preventing money laundering: FinCEN seeks to prevent the use of American real estate as a tool for concealing illicit sources of capital, by closing the loophole that previously allowed anonymous cash purchases through legal entities and trusts.
• Stepping up IRS enforcement: the information collected is accessible to tax authorities for cross-checking data. This allows the IRS to verify that foreign investors report their income from the property as required by law (Tax Compliance) and prevents the use of legal entities as a tool for circumventing reporting obligations.

Privacy within the system

Despite the stringent reporting obligation, it is important to note that the information (which includes passport details and addresses of the owners) does not become part of the public record (Public Records). Registration at the local land registry offices (County Clerk) will continue to show the name of the LLC only. The identifying information is kept in a confidential federal database intended for law enforcement and financial intelligence bodies only, so privacy against the general public and competitors is preserved.

From the writer's desk:

From March 2026, lawyers and developers accompanying real estate transactions in the USA bear increased responsibility for documenting the data. Non-compliance with the new regulations, omission of information or incomplete reporting may lead to heavy civil and criminal sanctions. Beyond the criminal aspect, the regulation changes the balance of power in the market: the closing process becomes more complex and requires in-depth due diligence (Due Diligence) already in the early stages of negotiations, in order to prevent last-minute delays due to missing information on the buyer's ownership structure.

We recommend that everyone operating in the American market, and in particular those making cash purchases through LLCs or trusts, re-examine their holding structures. Transparency is now an accomplished fact, and one must prepare to hand over full information to FinCEN as an integral part of every purchase transaction.

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

All issues