Foreigners in Portugal have the opportunity to obtain a permanent residence permit, a "Golden Visa" for Portugal and the Schengen area, by purchasing a property. The prerequisite for this is that the property must be worth at least €500,000 and the buyer must be the owner of the money invested. It is not possible to take out a loan for this purpose. In addition to residence, the "Golden Visa" also entitles the holder to apply for Portuguese citizenship after six years and there are opportunities for family reunification.
However, the programme is not to be continued. Instead, in future, obtaining a residence permit through investment is to be linked to factors such as job creation or the scientific or cultural relevance of the investment. The acquisition of property should no longer be sufficient.
The question therefore arises as to what the legal situation is in Germany in this regard. Is it possible for foreigners from non-EU countries who wish to live permanently in Germany to acquire a residence permit by purchasing property?
Are foreigners allowed to buy property in Germany?
The first question to be answered is whether foreigners can generally acquire property in Germany at all. This is clearly the case. Yes, foreigners can buy property in Germany without any restrictions. In this respect, it is also irrelevant whether the person is a foreign natural person or a foreign legal entity (a company).
Can foreigners obtain a residence permit to buy property?
This is also to be affirmed in principle. Wealthy foreigners in Germany are given the opportunity to acquire a temporary residence permit on the basis of Section 7 (1) sentence 3 AufenthG. To do so, the general requirements for obtaining a residence permit in accordance with Section 5 AufenthG must first be met. In addition, the applicant must provide a reason for their stay in Germany, which must not be absurd or abusive. It is important to note that Section 7 AufenthG is not a catch-all provision for other reasons for residence.
What requirements must be met in order to obtain a residence permit for property ownership?
In the cases set out in Section 7 (1) sentence 3 AufenthG, the applicant must prove that he/she is able to live off his/her own assets in order to secure his/her livelihood as required by Section 5 (1) no. 1 AufenthG. In addition to proof of assets, this can also be demonstrated by means of a so-called blocked account. This residence permit does not include authorisation for gainful employment.
Originally, Section 7 para. 1 sentence 3 AufenthG required the applicant to be able to live off the interest income from their own assets. However, in a ruling by the Administrative Court of Freiburg on 18 July 2018 (1 K 1083/17), it was possible to obtain a residence permit on the basis of property ownership - despite insufficient bank assets.
The applicant in this case was the owner of a plot of land in Germany that was leased for a monthly rent of €3,500. This was intended to secure the applicant's livelihood. The desire to live off the income from the property and to manage it locally was considered by the court to be sufficient grounds for residence within the meaning of the standard. In addition, the court stated that rental income from the property was just as secure an income for securing a livelihood as interest income from bank assets. Even in the event of termination by the tenant, there were sufficient opportunities to realise the property.
However, property ownership alone, without the resulting income, does not allow a residence permit to be issued in Germany in accordance with Section 7 (1) sentence 3 AufenthG. This is shown by a judgement of the Administrative Court of Munich from 12.05.2021 (M 25 K 19.2489). The applicant owned a flat in Germany jointly with her husband and had bank deposits totalling €80,000. She applied for a residence permit in accordance with Section 7 (1) sentence 3 AufenthG, arguing that the rent-free accommodation in her condominium and the bank assets would cover her living expenses for the - initially - requested period of residence of one year. The court dismissed the claim and argued that ownership of a flat in itself did not constitute grounds for residence in Germany within the meaning of the standard. Furthermore, the basic idea behind granting residence permits to wealthy foreigners was that they should be able to live off the income from their assets. In the present case, however, the applicant would gradually use up her assets in the form of the bank balance.
Conclusion
The cases described make it clear that there is no reliable way in Germany with clear criteria for granting a residence permit through the purchase of real estate, as is possible in other countries, for example through the "Golden Visa". It is true that it is possible to obtain a residence permit on the basis of one's own assets, which can also consist of real estate, via Section 7 para. 1 sentence 3 AufenthG. However, this is only possible if the property generates a regular income that covers living expenses. In addition, the authorities or the court will always weigh up the private and public interests, taking into account all the circumstances of the individual case.
Source:
- Munich Administrative Court, judgement of 12.05.2021, ref.: M 25 K 19.2489
- VG Freiburg, judgement from 18.07.2018, Ref.: 1 K 1083/17
- Dienelt in Bergmann/Dienelt, Aliens Law 14th edition 2022, § 7 AufenthG
- https://imigrante.sef.pt/en/solicitar/residir/art90-a/ Status: 07.04.23
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