Insights Archives - Bartra Wealth Advisors

Navigating the Shifting Landscape of Immigration by Investment Programs: Updates on IBI Programs in Five Popular Countries

Posted on September 14, 2023September 20, 2023 by bwa

In an era marked by increasing globalisation and mobility, the allure of securing a second citizenship or residency through investment has never been stronger. Immigration by Investment (IBI) programs, which allow individuals and families to acquire residency rights or new citizenship in exchange for substantial financial contributions, have evolved considerably in recent years. In this article, we’ll provide an update on the latest trends, changes, and considerations in the dynamic world of IBI programs.

The Growing Popularity of IBI Programs

Immigration by Investment programs have gained popularity worldwide, and this trend shows no signs of slowing down. Several factors contribute to their appeal:

Global Mobility: IBI programs often grant visa-free or visa-on-arrival access to numerous countries, enhancing the freedom of global travel for investors and their families.

Family Future Planning for Enhanced Education and Global Vision: IBI programs are increasingly favored by families seeking to secure a brighter future for their children. These programs enable better educational opportunities and a broader international perspective for the younger generation.

Family Protection for Greater Residence Flexibility, Healthcare and Wealth Planning: IBI programs are also chosen for the invaluable protection they offer to families. This protection allows for enhanced residence flexibility, a higher quality of life, better healthcare and medical systems and comprehensive wealth planning – IBI programmes empower families to strategically plan their wealth, safeguarding their financial future. By diversifying their assets across borders, families can better navigate economic fluctuations and global financial challenges.

The growing popularity of IBI programs stems from their ability to serve as a cornerstone for family future planning, educational enrichment, global mobility, residence flexibility, and comprehensive wealth protection. This trend is set to endure as families increasingly seek to secure a better tomorrow for themselves and their children.

Recent Trends and Changes

The global landscape of IBI programs is witnessing notable transformations as countries adapt to evolving economic and security concerns, their IBI programs are experiencing significant shifts that are redefining the opportunities available to individuals seeking residency or citizenship through investment.

Due Diligence Enhancements: Many countries have taken steps to strengthen their due diligence procedures. These measures are aimed at ensuring that applicants meet high standards of integrity and suitability, with a particular focus on verifying the legitimacy of their capital. This enhancement is crucial for maintaining the credibility and security of IBI programs.

Family Inclusion: An emerging trend in IBI programs is the expansion of eligibility beyond primary applicants. Numerous programs now include family members, allowing them to also enjoy the benefits of residency or citizenship. This inclusivity provides more comprehensive opportunities for families seeking to relocate.

Shift Away from Real Estate Investment: Several countries have either raised or are considering raising the investment thresholds for real estate within their IBI programs. This shift is intended to ensure that investors make substantial contributions to local property markets or support rural areas to stimulate economic activity and job opportunities. In some cases, countries have even suspended the real estate investment route to prevent housing crises.

Reduced Availability of IBI Programs: There is a noticeable reduction in the availability of Citizenship by Investment (CBI) or Residency by Investment (RIB) / Golden Visa programs in various countries. For example, Bulgaria, the UK, and Ireland (with some investment options available until the end of 2023) have announced the closure of their programs. Additionally, some countries have reduced the quota for their Golden Visa programs, as seen in Australia. Furthermore, the reopening of suspended BIB schemes has been delayed in certain countries, including Canada.

In conclusion, the landscape of IBI programs is undergoing significant changes. These trends reflect a growing emphasis on due diligence, inclusivity for families, a shift away from real estate-centric investments, and reduced programs availability in certain countries. These developments are reshaping the options available to individuals seeking residency or citizenship through investment.

Specific IBI Program Updates

Among all the IBI programs, Residence by Investment (RBI) / Golden Visa programs have gained significant popularity among individuals seeking to secure a second home in a foreign country. These programs offer a pathway to residency and, subsequently, citizenship, with specific residency requirements for investors and their families, often in exchange for designated financial investments. In this section, we will compare RBI programs in five prominent countries: Canada, Australia, Ireland, the UK, and Portugal. Each program offers unique benefits and considerations, enabling prospective investors to make informed decisions.

Canada – Quebec Immigrant Investor Program (QIIP)

Investment Requirement:

A minimum investment of CAD 1.2 million in an approved financial intermediary or by financing that investment for five years.

Minimum Net Worth:

A minimum of CAD 2 million in legally acquired net worth, alone or with the help of their spouse or common-law partner if accompanying the applicant.

Benefits:

Canadian residency provides access to excellent healthcare and education systems. It’s a pathway to Canadian citizenship and offers visa-free travel to numerous countries.

Considerations:

A minimum of two years of management experience over the course of five years prior to the submission of the candidate’s application. The experience must have been acquired in a specific enterprise (agricultural, commercial, industrial), or in a government or international agency, and in a position defined as full-time.

Program Status:

QIIP was initially suspended for review until April 2023, however, it’s further delayed until January 2024 with no specific timeline to re-open the program and new requirements may apply.

Australia – Significant Investor Visa (SIV) / Investor Stream (Subclass 188)

Investment Requirement:

188C: Invest a minimum of AUD 5 million in eligible ventures, small companies, and funds.
188B: Commit at least AUD 2.5 million to complying investments in Australia and maintain business/investment activity in Victoria.

Benefits:

188C provides a direct path to permanent residency.
188B offers a provisional visa with a pathway to permanent residency.
Australia offers a strong economy, quality healthcare, and a high standard of living.

Considerations:

188C: Investment options carry inherent risks; applicants must meet health and character requirements. Genuine intention to live in the nominating State or Territory is required.
188B: Applicants need at least three years of management experience in qualifying businesses/investments, must reside for three years before applying for permanent residence, have an age limit of under 55, and score at least 65 on the SkillSelect points test.

Program Status:

The Australian government has shifted its focus to skilled worker immigration post-pandemic, significantly reducing available quotas for Investor Visas.

UK – Tier 1 Investor Visa

Investment Requirement:

A minimum investment of £2 million in the UK, with options to increase investments for accelerated settlement.

Benefits:

The UK’s RBI program provides access to world-class education, healthcare, and business opportunities.
It leads to permanent residency and citizenship.

Considerations:

The program involves complex financial investments, and applicants must meet strict compliance requirements.

Program Status:

Since the Home Office scrapped the Tier 1 (Investor) visa in 2022, a replacement visa route has yet to be introduced, allowing High Net Worth Individuals (HNWIs) to move to the UK through substantial investment.

Portugal – Golden Visa Program

Available Investment Options:

Venture Capital Fund Investment: Capital transfers of €500,000 or more for participation units in venture capital funds (without real estate ties).
Research Funding: Investment of €500,000 or more in research activities conducted by public or private scientific research institutions.
Commercial Company Investment: Capital transfers of €500,000 or more for establishing a national territory-based commercial company or increasing the share capital of an existing company (with the creation of five permanent jobs).
Cultural Heritage Support: Non-refundable investment of €250,000 or more in support of artistic production, recovery, or maintenance of national cultural heritage.

Non-Available Investment Options (No Longer Accepted):

Capital transfers of €1,500,000 or more.
Purchasing real estate valued at €500,000 or higher.
Investing in the rehabilitation of real estate properties that are at least 30 years old, with a total investment of €350,000 or more.
Investing in real estate in low-density areas for €400,000 or €280,000.
Investing in funds with direct or indirect real estate investments.

Benefits:

Portugal’s Golden Visa offers EU residency with a path to citizenship.

Considerations:

An “official SEF source” indicates more than 7,000 pending golden visa applications, a significant departure from the SEF’s 10-year average of around 1,000 annual approvals. Clearing this backlog alone could take 6-7 years, pushing approval timelines past 2030 if new applications were suspended today.
Investors should note annual government fees, legal fees, and tax representative fees per family member.
A language test is required for Portuguese citizenship eligibility.

Ireland – Immigrant Investor Program (IIP)

Investment Requirement (popular options):

A minimum investment of €1 million in an Irish enterprise or Investment Fund.
A minimum €400,000 philanthropic donation to a project that benefits the arts, sports, health, culture, or education in Ireland.

Benefits:

Ireland offers a stable economy, an English-speaking environment, and residency in both the EU and the UK.
It provides a direct pathway to permanent residency with the potential for citizenship through naturalization, without the need for a language test, medical test, educational level, or age limit.
Investment can be made after receiving a pre-approval letter following the application.
The program offers the most flexibility for residency (only one day per year required), resulting in significant tax planning benefits for investors among English-speaking countries.

Considerations:

The Irish government announced the closure of the IIP in February of this year.
Only approved IIP projects can continue to accept investors for applying to the IIP with a grace period, and the available quotas are very limited for Enterprise investments and Endowment options.
An extension has been granted to the Investment Fund option offering the IIP, allowing it to run until the end of 2023. Regulated by the Central Bank of Ireland, this low-risk investment fund route has received special permission to continue processing applicants for the IIP until December 31 of this year.
Bartra Wealth Advisors specializes in Irish immigration, providing one-stop-shop solutions by assisting investors from initial consultations and applications to landing services and investment exits. We currently have limited IIP slots available for investors who have immediate application intentions.

Conclusion

Immigration by Investment programs continue to evolve, offering a pathway to enhanced global mobility, economic opportunities, and an improved quality of life. As countries adapt to changing circumstances and investor needs, staying informed about the latest trends and changes in IBI programs is essential for those considering this life-changing opportunity.

The choice of a Residence by Investment program depends on individual goals, financial capabilities, and preferences. Each country’s program offers distinct advantages, such as access to strong economies, high-quality living standards and educations, and pathways to citizenship. It is crucial for prospective investors to conduct thorough research, seek legal and financial advice, and carefully evaluate the unique benefits and considerations of each program before making a decision. With the right choice, investors can secure not only a second residence but also a brighter future for themselves and their families.

IIP Updates and Current Available Options

Posted on August 21, 2023August 21, 2023 by bwa

The Irish Immigrant Investor Programme (IIP) offers HNW investors and their families a safe, simple, and proven route to permanent residency in Ireland – one of Europe’s safest and most stable countries. The Programme has a wealth of advantages, such as investment only required to be made after approval and minimal residing requirement. Family members of the successful applicants can also be benefited from the IIP:

They have the right to live and work in Ireland, without any time constraints.
They can get access to educational and healthcare benefits.
They can apply for citizenship through naturalisation to obtain one of the most valuable passports worldwide.
Visa-free or Visa on arrival to 189 countries, including the United States, Schengen Area, and the United Kingdom.

In return, the Programme helps to bring foreign investment into Ireland (more than €1 billion in total) to build or improve its infrastructure, create new companies or jobs and raise capital to boost the economy. It has also contributed to many local communities, hospitals and sporting organisations.

However, the government decided to close the Programme with immediate effect in February, with a few limited exceptions:

The existing approved projects will not be affected for IIP applications and need to be completed within the timeframe set out per the business plan.
Applications not yet submitted, but where the project was significantly developed with the assistance of the IIP Unit of the Department of Justice, may be granted a grace period of three months to submit the finalised application.

The closure has changed the Irish IIP landscape since then.

Current IIP availability

Since the sudden closure announced in February for this decade-old, sought-after Residency by investment programme, investors have been looking for available project options to grasp the final IIP opportunities during a grace period granted by the government.

Among the four IIP investment options – Enterprise Investment, Endowment, Investment Fund, and REIT, statistically and historically, the applications and investments largely go to Enterprise investments, followed by Investment Fund and Endowment.

Over the last few months, it is believed that the approved Enterprise Investment projects i.e. social housing schemes and nursing homes, and Endowment projects should have been all snapped up by investors, leaving only a handful of investment slots from investors who have withdrawn from the applications or investments after getting approvals. For any existing Enterprise Investment and Endowment projects that are still available on the market, IIP investors are advised to carry out their own full due diligence before investing to assure that their chosen projects have been approved in order to secure their future approvals.

Worth noting is that an extension has been granted to the Investment Fund option offering IIP to run until the end of 2023. Regulated by the Central Bank of Ireland, this low-risk investment fund route has been granted special permission to continue processing applicants for IIP until 31^st December this year.

Characteristics of IIP investment Fund

All funds have to be invested in Ireland and must represent equity stakes in Irish-registered companies that are not listed on any stock exchange.
The funds and fund managers will have to be regulated by the Central Bank to conduct business in Ireland.
Only fund managers with an established record of managing regulated funds will be accepted to manage funds in Ireland.
Under this scheme, investors will receive a residence permit for 5 years. An initial permit for two years and another 3-year permit if investors keep the investment. After the 5-year period, investors can apply for renewals in 5-year tranches.

How can investors choose their IIP Investment Fund?

Each fund has their investment objectives and strategies, when choosing a fund for the purpose of IIP, broadly speaking, investors are suggested to consider the following 4 key areas:

Understand the nature of the fund and its investment objectives: What companies and assets is the fund investing in and what is it trying to achieve, i.e. some funds invest in Irish enterprises and assets for achieving capital growth, while some simply provide loans to commercial sectors for earning interest.
Understand the risk factors: Different investment strategies have their associated risks. Generally speaking, higher growth rates indicate higher risk. Also, the sectors where the investments go in would affect the performance of the fund, market performance is one of the key factors. The more diversified the sectors of the investments in the portfolio, the lower the risk of major losses that can result from over-emphasizing a single asset class.
Know the fund managers and Board of Directors: The performance of the fund is largely dependent on the fund management team’s experience and expertise. Having a good understanding of the companies and key stakeholders in the fund is essential for investors to choose a suitable IIP investment fund.
Understand the return and fees: if capital refund is the expectation, investors would have to choose a fund whose investment objective is aligned with the investors, as some growth funds do not provide the full capital return. Investors are also advised to understand the fund fee structure, as some funds would charge management fees and costs for operations.

It is worth mentioning that, although most of the funds are 5-year investment period, due to the funds’ nature of their maturity date, investors who invest in a fund may have less than a 5 year investment horizon due to each fund’s maturity time as well as IIP’s approval time.

Invest IIP with Bartra Wealth Advisors

Half a year since the closure announcement was made, in August, Bartra received over 20 approval letters for our clients across our offices. To date, Bartra have more than 300 approved Investors through IIP, with a total investment amount exceeding €220 million. The approvals prove that clients’ investment through Bartra is safe and we are reliable to deliver high-quality, government-backed projects to secure clients’ residency.

In addition to its minimal residency requirement, IIP offers some investment options that are capital protected investments and they are also passive investments, which means the initial capital of investors will be repaid to investors at its maturity and investors do not have to manage or operate their investments. This is another major advantage of IIP for those who are looking for a safe and secure investment opportunity. It is also hassle-free at the same time as it requires minimal time and effort.

Investing with Bartra not only can secure your path to a successful Irish residency, through Bartra’s one-stop-shop investment services and its five-year customer servicing and settlement services in Ireland, clients can be rest assured of a smooth transition and relocation in Ireland.

Click here to learn more about the IIP or to contact us.

Bartra only have a small number of available slots remaining for IIP-approved investment projects, contact us now and secure your successful IIP journey right away.

Irish IIP Key Benefits: holding PR status for entire family without residing in Ireland

Posted on August 5, 2023August 21, 2023 by bwa

As part of the ‘Irish IIP Key Benefits’ article series and following the previous blog about Approval First, Invest Later, in this article, we are going to discuss the scheme’s other advantage – minimal residency requirement.

The Irish Immigrant Investor Programme is a unique and highly sought-after immigration program that provides numerous benefits to those seeking to become Irish citizens. One of the most notable benefits of this program is its minimum residency requirement, which is very rare among English-speaking immigration programs. This residing flexibility not only offers investors an opportunity that they do not have to sacrifice their current lifestyle or uproot their families, but it also means that investors will be able to plan ahead and minimise their tax liabilities.

IIP a rare RBI programme

The last couple of years have been quite eventful, causing more uncertainties in the world. Investors and HNWIs across the world are seeking out second residencies that offer them and their families peace of mind while dealing with uncertainties. This has led to unprecedented interest in the Residency/Citizenship by Investment (RCBI) industry worldwide.

Ireland’s decade-old IIP soared in popularity in 2022, with record applications numbering more than 1,000 from across the world, more than twice the annual record set in 2019. As one of the largest Irish immigration IIP fundraisers, Bartra was involved in roughly 25% of the total Irish IIP applications.

One of the notable advantages of IIP is that the scheme requires that investors only reside in Ireland for one day per year for the first five years. The successful investor and his or her family will be granted a ‘Stamp 4’ status visa (equivalent to a Permanent Residency status) and family members will be benefited from their own permission to work, study or establish a business in Ireland as they wish, or they can hold their PR status without having to actually reside in Ireland. This freedom to effectively come and go as they like, makes the IIP stand out from all other immigration routes available to persons wishing to establish ties to Ireland. For those investors who choose to live in Ireland for 5 years, they may then be eligible to apply for citizenship by naturalisation. The Irish passport is widely recognised as one of the most valuable for those travelling internationally, and it is the only passport that allows citizens to travel, live and work in Europe and the UK.

Tax planning

Because of IIP’s minimal residency requirement, investors who stay in Ireland for less than 183 days or more in a tax year, are not considered taxable residents with no tax liabilities, such as no income tax for foreign-soured income, no inheritance tax and no capital gain tax. Investors and their families can decide themselves whether to become tax residents in Ireland depending on their situation.

Furthermore, the remittance basis of tax is another favourable tax treaty to people coming into Ireland if non-domiciled. If not an Irish national, then any investment income is only taxable if that goes into Ireland. There are very few countries that offer this favourable tax treatment.

We previously discussed some tax scenarios (also compared taxes between Ireland and UK), and provided many practical tips, click to read the article to learn more about the tax issues where we interviewed KPMG.

Conclusion

After all, the Irish Immigrant Investor Programme (IIP) is a unique and highly sought-after immigration program that offers numerous benefits to those seeking Irish residency and creating a pathway to becoming an Irish citizen. From its minimal residency requirement to its capital protection, passive investment options and tax planning benefits, the IIP provides a wealth of opportunities for investors looking to expand their horizons and take advantage of all the benefits that Ireland has to offer.

Whether you are looking to secure a better future for yourself and your family, or simply enjoy the many benefits of Irish PR, the Irish Immigrant Investor Programme (IIP) is the perfect choice for you. So why wait? Start your IIP journey now with Bartra today and take the first step towards a better future.

Click here to learn more about the IIP or to contact us.

Note: Bartra only have a small number of available slots for the IIP-approved investment projects.

Invest in high-income Irish property

Posted on May 18, 2023May 18, 2023 by bwa

Many of our clients may know, renting or buying a property in Ireland is extremely difficult due to its severe supply constraints. Because of the supply-demand imbalance, coupled with other factors such as its fast-growing economy and world-class education, more people are moving to Ireland than ever before, investing in real estate in Ireland can be uneasy, but highly profitable.

While there are no restrictions on nationality when purchasing property in Ireland, the property is low priced comparatively with developed English-speaking countries such as the UK and the US, but rents are relatively high, many buy-to-let investors have been finding the highest rental yields in Ireland amongst European countries in recent years, benefiting from the capital growth at the same time.

We previously provided a guide to buying a property in Ireland, in this article, we are going to discuss what makes Dublin’s buy-to-let property scheme attractive.

The two main sources of income in a buy-to-let investment are rental yield and capital growth. These are very different terms that describe the two income streams a property can deliver. It is also important for investors to understand the price-to-rent ratio which provides insight into a given property’s potential return on investment.

Rental yield and rental price performance

One of the most important metrics for an investor to consider is the rental yield they can receive. Rental yield is based on you letting your property out to a tenant and what you can expect the rental income over a year. Understanding the average rental yields in a property market is vital for making an informed decision for choosing a property for investment.

Irish properties provide higher average rental yields than many popular property investment global cities.

Although it is one of the best countries to invest in rental property, Ireland is not usually found on the list of the best countries for real estate investment due to a reason – availability of stock. Stock of residential property has always been a problem in Ireland and the problem continues to worsen. The number of houses for sale dropped 26% in three years up to September 2022. Furthermore, many new developments are snapped up by institutional investors, further reducing the availability of stock for individual investors to enter the market.

In terms of rental prices performance, according to the property website daft.ie, Irish rental prices rose the most on record in 2022 with increases of 20% in some cities. In Q4, average rents were 13.7% higher than the same period in 2021.

Which is best to buy for investment: 1-bedroom, 2-bedroom or 3-bedroom apartment?

When it comes to an investment property, bigger is not always better. Firstly, 1-bed and 2-bed appeal to the widest rental market compared to 3-bed properties, which means they are in higher demand and would minimise rent lost due to shorter vacant periods. Secondly, 1-bed and 2-bed typically provide stronger yields as the 3-bed property requires a higher capital entry point. Last but not least, in the exit strategy for an investment property, 1-bed and 2-bed have a stronger secondary market as they appeal to more owner-occupiers and have lower furnishing costs than a 3-bed property.

There are many advantages of investing in a 1-bed apartment for investors to invest in the Irish property market for the first time:

It has a lower capital entry point compared to a 2-bed apartment.
It is cheaper and easier to furnish than a 2-bed property.
It has a lower maintenance cost.
It appeals to young professionals and graduates, as well as young couples.

Buying 1-bed apartments is a good investment choice within the buy-to-let sector in the greater Dublin area. This is largely down to their appeal to a wide rental demographic, and because remote working is becoming a new norm for many companies in Dublin, many people would rather stay away from the city centre but in a less busy, more relaxing environment to live.

In Dublin some popular districts, gross rental yields range from 6.19% to 7.96%, which are generally considered excellent yields. One-bedroom apartments will earn relatively more than two-bedroom apartments. To earn higher returns, buy smaller units.

Capital Growth

Another important source of income in a buy-to-let investment is capital growth. Capital growth is your profit earned on a property purchase and is based on the capital rises that you may experience as property prices go up.

According to Irish Central Statistics Office (CSO), in July 2022, the national residential property price index rose strongly by 13.1% from a year earlier, up from a y-o-y increase of 8.48% in the same period in 2021. The latest data from the Property Price Register (PPR) revealed that Irish house prices were up 8.9% in the first three months of 2023.

The graph shows the 10-year residential property price index in Ireland. Source from Central Statistics Office.

According to PPR’s same set of data, Dublin remained the most expensive county with the median price of homes sold in the first quarter of 2023 up 8.1% year-on-year and 1.2% quarter-one-quarter.

Investment properties in Dublin and the surrounding areas are anticipated to be benefited from a price increase. When considering the best places to buy in Dublin, you may want to consider the up-and-coming areas around the city, which provide amenities for families and commuters looking for the perfect balance between city life and quiet neighbourhoods. While your rental income may be less than the one of a property in the city centre, you will likely pay a lower purchase price. This means your overall yield and profit are healthier than if you opted for a smaller property in Dublin’s most elite districts.

Dublin property vs London property

Many people like to invest property in the UK, but many of them do not know Ireland can offer better value. We can compare the properties of the two places from their price per square metre (psm), rent per month, and price-to-rent ratio.

Investors can enjoy a 1.5 times larger space purchasing an Irish property than in the UK, for the same capital amount and a similar growth rate of property price.

From a rental perspective, although rents in some city centre locations are higher in London than in Dublin, the property price is lower in Dublin, offering stronger rental yields (data refer to the table above). investors would also have to take the carrying costs into account, those are the fees for owning a property, for example, the property management fees, and usually the fees are lower in Dublin than in London.

Investors are suggested to consider the price-to-rent ratio when investing in a property. The ratio is an essential indicator because it provides insight into a given property’s potential return on investment (ROI). Generally speaking, a lower ratio indicates that the property has good potential to generate long-term returns, while a higher ratio suggests that the property may not provide adequate returns over teams, and is less likely an investor can achieve positive cash flow from renting the property out after deducting from operating expenses and mortgages. A good price-to-rent ratio is considered to be 15 or lower indicating that investing in real estate in that area would be more profitable for renting.

The expected rental income of this Malahide project is around €2,250 for a 1-bed unit and €2,700 for a 2-bed unit, offering gross rental yields of about 5.6%-6.5%.

Conclusion

Properties provide an excellent hedge against inflation that attracts many investors who are currently expanding their property portfolio. Ireland ranks highly as a strategic location for investors seeking to secure long-term income generated by property investments. Dublin and its surrounding areas offer a stable housing market with the potential to generate high rental income as well as to make great ROIs on the right properties, making it an excellent location for global property investors.

Guide to buying a property in Ireland

Posted on April 15, 2023April 18, 2023 by bwa

Ireland has become a hugely popular immigration destination in recent years. High quality of life, excellent education, a robust economy, and an abundance of job opportunities are just a few of the many factors that have led to its growing popularity.

For those who plan to stay in Ireland, buying a house to live in or for the family makes perfect sense. There are no residency-based restrictions to buying property in Ireland. You can buy property here if you are an Irish citizen, EU/EEA citizen, non-EEA national, or even non-resident in Ireland.

However, due to its growing population, strong employment market, and coupled with a very tight housing supply, property buyers and investors can often find it difficult to buy a residence in Ireland. This is most evident in Dublin and in other prime locations. A 1-bedroom or a 2-bedroom apartment can be snapped up by the local market very quickly with the average time to sale agreed to be about 2-3 months, some only take a few weeks, indicative of a tight market.

The housing demand remains strong despite the uncertain economic environment posted by events in Ukraine, higher energy prices, CPI inflation, and European Central Bank (ECB) rate hikes. Transactions are currently still being agreed above the asking price as the demand remains high.

From an investment perspective – historically, real estate has proven to be a stable investment during inflation with a high chance of value increase. Ireland offers strong economic stability, and investing in property in Ireland is not only safe but also profitable due to yields that can go beyond 5%.

It is an exciting opportunity to own a property in Ireland right now, however, you may want to pay attention to the following information.

Budgeting and mortgage

When buying a property in Ireland, there are some associated costs a buyer would have to consider, such as legal fees, insurance, and stamp duty. Allow about 3-5% of the purchase price to cover the costs of buying your new home in Ireland.

Stamp duty applies to both new and second-hand property. Stamp duty is applied every time you become the new owner of a property. The current rates are 1% of the first €1 million paid for a property and 2% on any amount above €1 million.

For example, if you buy a house for €1.3 million, you will pay €10,000 (1%) on the first 1 million and €6,000 (2%) on the remaining €300,000.

Where VAT applies stamp duty is calculated on the property price excluding vat.

Stamp duty is usually paid when you complete the process of buying the property and your solicitor will usually arrange this for you.

If applying for a mortgage, it is uneasy for foreigners. You will usually need to be living in Ireland for at least 6 months and have been in employment for at least 12 months before most lenders (i.e. banks) will consider you for a mortgage.

It can sometimes be easier for an “expatriate” to get a mortgage when someone is returning to Ireland after being abroad for a few years. Some Irish banks will not even consider lending to someone who lives outside Ireland and doesn’t have most of their income in Euros.

Energy rating

All homes for sale must have a Building Energy Rating (BER). The BER tells you how energy-efficient your home is. A-rated properties are the most energy efficient while G-rated homes are the least energy efficient. When choosing a property to buy, considering its energy rating is important, not only does it help lower energy use, but also houses with a good energy efficiency rating can fetch almost 10% more than a comparable property with a low BER rating.

The Solicitor and the power of attorney

During the property purchase process, it’s advisable to have sound legal advice from a party acting in your interest, especially when you are not able to stay in Ireland to manage the purchase process, you can nominate a solicitor based in Ireland to represent you throughout the whole legal process and grant your solicitor power of attorney.

Solicitors’ charges vary substantially, however, a good solicitor who is experienced in representing buyers from overseas can help you avoid or deal with common problems, and that will save you a lot of time with less hassle, this is usually money well spent!

Taxation/PPS

It is important for property buyers to apply for an Irish PPS Number (equivalent to a National Insurance Number) personally before purchasing a property in Ireland regardless of whether you are a resident or non-resident. You are not permitted to complete a significant financial transaction without the PPS Number. Your solicitor can advise you on this if you are not sure where to start.

The buying process

In order to secure your chosen property and have it taken off the market, you would normally be required to make a reservation with a deposit, then usually pay 10% of the property’s cost within a few weeks of signing a contract which your solicitor sends to the seller’s solicitor. The balance of monies due is payable on property completion.

Requisitions on title

Between signing the contract and paying the remainder of the monies owed, your solicitor will draft a purchase deed and ask the seller’s solicitor a range of standard questions (known as Requisitions on Title) regarding the sale of the property. Note, at this point you as the buyer have committed yourself to purchase the property (providing the answers to the requisitions are satisfactory), but the seller is not committed to selling the property until they sign the Deed of Conveyance prepared by your solicitor.

Buying a house is not only exciting, but it’s one of life’s achievements. Property is also a great investment asset to own for creating passive income and long-term wealth. We at Bartra are always here to advise our clients where to live and where to buy in Ireland. Interested in buying a property in Ireland? Contact us now.

Read on for more published content about Ireland property: Our colleague Richard Lenehan met Jonathan Dowling, who works for Bartra New Homes, in Dublin’s prime residential district Blackrock to check out the Glensavage Estate and learn more about the residential buying process for overseas buyers. Click to view the video.

Ireland IIP Key Benefits: Approval First, Invest Later

Posted on January 17, 2023January 19, 2023 by bwa

The Irish Immigrant Investor Programme (IIP) is gaining in popularity among affluent families looking for alternative residency in an English-speaking country where they can enjoy better education and quality of life. In addition, there are a number of other benefits that the IIP offers.

The IIP used to be undervalued, but that is no longer the case today, particularly post-Brexit and following the UK’s shut down of its investor visa route. As of September 2022, more than 1,600 IIP applications have been approved for investment with a value of over €1 billion, and last year alone there were around 900 applications, an all-time high in the IIP’s history. For those who are not familiar with the IIP, read our previous blog highlighting the 4 things to know about the Ireland IIP, or watch our explainer video. Here, we will focus on one of the IIP’s key features – investing only after approval is received, and what that actually means to an investor.

Safety and liquidity planning

Most Residency By Investment (RBI) programmes and Citizenship By Investment (CBI) programmes require the applicant to invest first.

To qualify for Australia’s Investor Stream Visa, for example, you will need to commit at least AU$2,500,000, with your investment allocated according to set criteria, and processing your application can take more than 20 months. Under the US’s Immigrant Investor Program or EB-5, applicants are required to invest a minimum of US$1,050,000 for standard investments or US$800,000 for investment in a commercial enterprise principally doing business in a targeted employment area or in a regional centre-associated infrastructure project. EB-5 processing can take 2 to 3 years for the Standard I-526 petition to be adjudicated, and the investor’s capital must be placed “at-risk’” until the end of conditional permanent residency with a chance for gain and a risk of loss — without any guarantees of return of capital.

Ireland’s IIP is a rare RBI programme in that the applicant’s investment is not required to be made until the application has been approved. After applying for the IIP, processing is straightforward and approval usually takes between 6 to 8 months. Whether you are choosing the €400,000 Endowment option or the €1 million Enterprise Investment option, applicants who are successful will be issued with a pre-approval letter from the Irish Naturalisation and Immigration Services (INIS) inviting them to make their investments, which must be made within 90 days of receiving the letter. Once an applicant fulfills the investment requirements, they and their qualifying family members will be granted residence permission in Ireland under Stamp 4 conditions, which is equivalent to a Permanent Residence status.

Under the IIP, investors do not need to liquidate their assets upon application. They have about 6-8 months to cash out their investments, or to pledge their assets to secure loans at a suitable interest rate so they do not have to sell off their portfolio. Compared to other RBI programmes, the IIP offers greater flexibility for investors to plan their finances, with better clarity investing in IIP-qualified projects once approvals are received. Additionally, capital is protected when investing in the IIP Enterprise option.

Asset diversification

Ireland continues to rank highly as a strategic location for investors seeking to secure long-term income generated by real estate investment and funding according to EY Ireland. Factors include its growing popularity, attractive employment demographics, high levels of FDI, favourable supply and demand dynamics, robust legal system, improving infrastructure system and strong performance of certain real estate asset classes.

Investing in the IIP’s much-needed social infrastructure projects, such as social housing and nursing homes, is very safe. Demand is strong as more people require housing due to a growing and rapidly aging population, with the latter requiring more homes and facilities to provide long-term specialised elderly care. Many institutional investors, including private equity-owned companies, are in favour of adding these assets to their portfolios to meet long-term investment objectives, especially if they can achieve economies of scale. For example, Bartra Healthcare successfully sold three nursing homes and one transitional care unit as a portfolio to Belgian REIT Aedifica in 2022, for about €161 million.

For IIP investors, investing in Bartra’s nursing home projects offers 4% annual interest throughout the five-year investment period, which is €200,000 at maturity on top of the investment principal. Investing in the IIP is also a Euro-based investment, which offers currency diversification for investors.

Click here to learn more about the IIP.

Poplar Row social housing – client Bruce Zheng shares his IIP journey

Posted on August 26, 2022August 26, 2022 by bwa

This summer, we took one of our IIP investors to visit our Poplar Row social housing project in Ireland. Poole House, a new five-storey residential building conveniently located in Dublin 3, was officially completed in June this year. Our client, Mr Bruce Zheng, was thrilled to see it. He and his family invested in the project back in 2019 before construction commenced in July 2020.

During Bruce’s visit to Bartra’s head office and the Poplar Row site, our China-based Irish colleague, Richard Lenehan interviewed Bruce, who now has the Stamp 4 visa as a local PR, which has been renewed successfully, and has received his investment principal.

“I am glad that I invested in Bartra’s IIP project back in 2019. Now I am able to be here and see the project in person, see that it’s built, looking great and I can touch it; it’s real. That’s why I always love tangible assets,” says Bruce.

“I am happy to shout out to Bartra for anyone who’s looking for IIP investments. Bartra is the number one go-to company. The reason I chose this social housing project for my investment was because of Bartra’s track record and the principal repayment guarantee. I feel safe and secure with my hard-earned money.

“I also like the fact that the projects are either leased to or sold to a Local Authority or Approved Housing Body. All of these factors give me confidence in investing in Barta’s projects, especially given the shortage of housing supply in Ireland. And the money I put in can help the local community with more and better housing that also makes me feel proud of my investments.

“Some of my friends asked me why I chose Ireland. I think Ireland offers a wealth of opportunities for my family, not only is it an English-speaking country, which makes communication easier, but it’s also very well connected with EU countries, as well as the United Kingdom and the US, so we are able to access more resources and can choose to live in different places.”

Watch our interview with Bruce to learn more about his journey to Ireland and his experience with the IIP and Bartra.

Bartra social housing projects

Under its Housing for All policy, the Irish Government has clearly identified the need to increase the supply of both private and social housing as its number one priority, with a commitment to deliver in excess of 88,000 Social Housing Units from 2022 to 2030.

For Bartra, building new homes is a key part of our business. As well as providing more much-needed housing, our construction programme helps to create jobs and training opportunities, regenerate neighbourhoods and support communities across Ireland.

Andrew Ennis, Director of Investments and Structuring, says, “Our plan is to deliver at least 3,000 new homes between now and 2030, with our primary focus on the continued delivery of sustainable social housing. We want to build more homes for social and affordable rent and believe social housing – the right homes, in the right places – could play a bigger role in reducing the impact of the housing supply crisis.

“In addition to building our own homes, we are engaged in a series of partnerships with Approved Housing Bodies and the Irish State and will continue to build more homes in partnership with these organisations.”

IIP funding provides safe investments for IIP investors

Bartra’s Colmcille House, Stoneybatter social housing project, completed in 2021

The construction of Bartra’s social housing is funded by investors seeking to participate in the IIP programme.

Bartra intends to develop bundles of social housing projects where it already owns the site, to provide visibility to IIP investors on the nature of the projects that they are investing in.

Batra launched its social housing business in 2017 to assist the Irish State in the provision of much-needed family homes. Bartra has established a dedicated social housing team, which is tasked with identifying development and refurbishment sites suitable for social housing where Bartra can deliver attractive investment opportunities to investors. The Bartra team will focus on acquiring opportunistic sites, primarily in the Dublin area.

Bartra has progressed its social housing sites in line with the business plans provided to investors:

Bartra acquired a modern residential block comprising 27 apartments over five floors and a ground floor commercial unit on Pim Street in the heart of Dublin City. Refurbishment works to the value of €1m were completed in 2018 and this development is now fully let to Dublin City Council.
Colmcille House in Stoneybatter, a new development consisting of 23 apartments over six storeys located less than 2km from the city centre, was completed in 2021 and again fully leased to Dublin City Council.
Poole House in Poplar Row, a new five-storey residential building conveniently located in Dublin 3 close to the city centre, was officially completed in June 2022.
Construction is also underway on the 26-unit Clonross scheme in Blanchardstown and is about to commence on the 36-unit Clonliffe Road Scheme.

We continue to expand our social housing portfolios. One portfolio, consisting of four new sites – Old Navan Road, Clonliffe, Old Kilmainham and Broombridge – with a total cost of approximately €62.7 million, has already been fully subscribed.

Another portfolio, which consists of two new sites – Belmayne and Woodlands – with a total cost of approximately €36.2 million, is currently available for IIP investors.

Bartra Group CEO Mike Flannery says, “Bartra is fast becoming one of the largest providers of social housing in Ireland. We are committed to our projects’ quality, from location to architecture to build.”

At Bartra, we want to build more homes for the community and contribute to society by helping to reduce housing problems.

Ireland Economy Latest – H1 2022

Posted on August 18, 2022 by bwa

The outlook for the Irish economy is strong following its performance in the first half of 2022. Despite inflation rises which may persist and have put pressure on GDP growth, the economic recovery from the most acute effects of the Covid-19 pandemic has been robust. The European Commission revised its expectation for Ireland’s real GDP growth for 2022 down only slightly to 5.3% (from 5.4% in its May 2022 forecast), while the 2023 annual growth projection has been revised down to 4.0% (from 4.4% in May).

Image source from European Commission

Despite global economic uncertainty over the last couple of year, the Irish economy has been resilient. According to Eurostat, Ireland recorded the second highest level of GDP per capita in the EU in 2021, one place behind Luxembourg. In the nominal ranking, Ireland overtook Singapore to become the 2nd richest economy in the world, while in the Purchasing Power Parity (PPP) ranking, Ireland overtook Singapore and Qatar to become the 2nd richest economy in the world.

International trade and FDI are the key drivers of global value chains (GVCs) and they are both key contributors to Ireland’s economy. Ireland’s stock of inward FDI is one of the largest in Europe and its exports of goods and services as a percentage of GDP was 135% in 2021, according to the World Bank.

Below, we take a closer look at these two key economic drivers that contribute to making Ireland the third most competitive country in the eurozone and 11^th in the world rankings.

Ability to attract investment and increase employment

Apple’s first facility outside of the US, located in Cork, Ireland (Image courtesy of Apple.com Newsroom)

Approvals of new investments and job creation by foreign multinationals in Ireland reached record levels in the first half of the year.

The Industrial Development Agency’s (IDA) mid-year results show that between January and the end of June this year 155 additional investments were pledged, up 9% on the same period last year and 10% above that recorded pre-pandemic in 2019. Of these, 73 were from new name companies setting up operations in Ireland for the first time and a similar number were located in regional parts of the country. The largest investments announced in the first half of the year included €12 billion from Intel, a new campus building at Apple in Cork capable of accommodating 1,300 staff, and 1,000 new jobs at TikTok and Workday.

“These are very strong half-year results achieved against a backdrop of a global pandemic, Brexit, considerable geopolitical uncertainty globally, inflationary pressures, supply chain challenges, climate change and energy issues, and, since the start of the year, Russia’s invasion of Ukraine,” said IDA chief executive Martin Shanahan, who is to step down in the coming months. He added, “We should never forget that the jobs and revenue created by multinationals helped to keep us out of recession when the pandemic hit and are now giving us the financial firepower to ease the cost of living crisis and avoid recession once again.”

Some of the leading investments secured

With regard to employment, Irish enterprises and businesses are active, particularly multinational organisations, given the significant amount of FDI. Workday’s recent announcement of the creation of an additional 1,000 jobs at their European headquarters in Dublin, which already has more than 1,700 employees, is one of many testaments to the long-term commitments multinationals continue to make in Ireland.

Job growth and a strong economy boosted the fundamentals for commercial real estate. The year-to-date rate of rental growth in the Dublin office market has surpassed expectations with prime headline rents for new high-specification ESG-compliant buildings in the city centre now circa €646 per square metre or €60 per sqft, according to CBRE’s May research report. In addition to recruitment activities in the Dublin market, there have been several significant regional job announcements in recent months, which in turn is feeding directly into the appetite for modern office buildings in cities including Cork, Limerick and Galway.

Export

With respect to international trade, according to the latest figures released from the Central Statistics Office (CSO) in May 2022, Ireland’s unadjusted exports of goods were valued at €18 billion. The increases in goods exports were driven mainly by growth in the exports of medical devices and pharmaceutical products. Exports of these goods accounted for 38% of all exports in 2021.

Ireland is the 2nd largest exporter of pharmaceutical goods and medicines in the EU
The level of employment in high tech manufacturing as a share of total employment is 29%, the highest in the EU

In terms of geographic breakdown of Irish exports, the EU accounted for 35% of total goods exports in May 2022 of which Germany was the largest importer, while the Netherlands and Belgium were second and third respectively. Total EU exports in May 2022 increased by €841 million (+15%) compared with May 2021. The USA was the main non-EU exports destination accounting for €5,416 million (30%) of total exports in May 2022.

Electrical and electronic equipment, optical and medical apparatus, and pharmaceutical products are the goods largely imported from Ireland to other parts of the world, including China and Hong Kong, Vietnam and the UAE.

The table shows the value of goods in USD exported from Ireland to China.

According to the latest available data, in 2020 Ireland exported a total of $11.9 billion worth of goods to China, up about 18% from 2019. During the last 25 years, the exports of Ireland to China had increased at an annualised rate of 22.9%, from $67.9 million in 1995 to $11.9 billion in 2020.

The main products that Ireland exported to China include integrated circuits ($6.91B), nitrogen heterocyclic compounds ($867M), and pharmaceutical products (i.e. vaccines, blood, antisera, toxins and cultures) ($567M).

Food is also increasinly imported from Ireland to China. Exports of Irish pork to China hit a record high in 2021 – 40% of the total 542 million euros (US$604.6 million) of pig meat were exported to China, an increase of 8% from 2020. Ireland is now seeking to diversify its exports of meat to the country, said Conor O’Sullivan, Shanghai-based Manager of Bord Bia, Irish Food Board, the promotional agency for food products of the Irish government. “I have noticed that food consumption here is becoming more diverse. Chinese used to eat pork mainly, but more and more people are now trying imported lamb, beef, chicken and also plant-based protein,” he said. “This is a very big opportunity for high-quality Irish foods.”

Exports of Ireland to Hong Kong had increased at an annualised rate of 6.15%, from $177 million in 1995 to $787 million in 2020. The top three products that Ireland exported to Hong Kong were jewellery ($128M), packaged medicaments ($107M), and blank audio media ($96.8M).

Ireland also exported services to Hong Kong, including financial services ($125M), and insurance services ($68.3M) along with all other business services worth a total value of $345 million in 2018.

In 2020, Vietnam imported $1.76 billion worth of goods from Ireland. The main products were integrated circuits ($1.54B), packaged medicaments ($43.3M), and pharmaceutical products ($27.4M). Exports from Ireland to Vietnam had increased at an annualised rate of 24.6%, from $7.18M in 1995 to $1.76B in 2020.

Economic and population growth have been driving structural change in Vietnam’s economy. The population of Vietnam is set to rise to 100 million people by 2024, equivalent to around one-fifth of the current EU population and 20 times the current Irish population, and the rate of urbanisation will reach 40% by 2024. Vietnam’s growing urban population and increasing disposable income have contributed to the healthy growth of consumer food service, which has led to an increase in Ireland’s food exports to Vietnam. While meat and dairy products are the largest shares of this, beverages and seafood also contributed strongly.

The EU’s Free Trade Agreement with Vietnam presents a huge opportunity, especially with the elimination of 99% tariffs and non-tariff barriers. This makes it much easier for Irish exporters of dairy and livestock food products, such as skimmed milk, cheese and meats like pork and beef. Former Minister for Agriculture, Food and the Marine, Michael Creed said, “Ireland can bring particular assistance to Vietnam on the development of sustainable agriculture, but also that we can be an important source of high-quality food products for its growing population.”

In the UAE, which is home to an estimated 10,000 Irish expatriates and with a population of 9.6 million, Irish exports to the UAE rose 12%, and were close to $660 million in 2020 despite the challenges posed by the Covid-19 pandemic. The main products were packaged medicaments ($121M), gas turbines ($106M), and pharmaceutical products ($96.4M). Exports from Ireland to the UAE had increased at an annualized rate of 8.56%, from $84.6M in 1995 to $660M in 2020.

Summary

Against the backdrop of high COVID-19 vaccination rates, the full reopening of the economy in H1 is boosting a broad-based recovery. Business conditions underpin sizeable employment gains, while household excess savings and wage increases support consumer spending. The contributions of Foreign Direct Investment (FDI) and international trade to the Irish economy have been strong and are forecast to remain robust for the rest of the year with Ireland outperforming many EU countries, and making it an attractive and competitive country for businesses and investments.