Since October 2012, Portugal has successfully implemented a program for providing a simplified residence permit in exchange for investments in real estate, production or securities. Since then, it has undergone several changes, the latest of which turned out to be the most significant and least favorable for potential investors, although there is still plenty of time before it comes into force.
We are talking about the exclusion from the Golden Visa program of any property located in Lisbon, Porto and Cascais – three cities that were very popular among foreign home buyers. As a result of the massive influx of foreigners, prices for houses and apartments became unaffordable for the “upper” Portuguese middle class, while the number of buildings being built could not satisfy the steadily growing demand.
For the first time, talk that real estate in Lisbon, Porto and Cascais would stop being sold to citizens of other countries, regardless of its value, began in February 2020. Parliament then gave the Portuguese center-left government the right to make fundamental modifications to the existing terms of the program. True, at that time the “forbidden list” mentioned seaside resorts on the Algarve coast, where citizens of Great Britain and Germany traditionally preferred to settle.
The Covid-19 pandemic, which affected the Portuguese real estate market, forced the postponement of this decision, and until last December, the procedure for obtaining a residence permit in Portugal in accordance with the Golden Visa program proceeded as before. It won’t be too late to apply under the old rules until 1 July 2021, when local authorities will set the terms of a transition period that will last until at least early 2022 to ensure the implementation of the new measures goes as smoothly as possible.
In the future, in order to obtain a Portuguese residence permit under the Golden Visa program, you will need to purchase real estate in Madeira, the Azores, in areas with low population density. The issue of purchasing historical buildings requiring major renovations in popular regions for an amount starting from 350 thousand euros has not yet been resolved. But judging by the fact that less than 10% of investors took advantage of this option, it is unlikely to remain in force.
Innovations, the purpose of which is to redirect financial flow to underdeveloped regions of the country and stabilize prices, will not affect the interests of residence permit holders – both those renewing their status and reuniting with other family members. Everyone else will either have to hurry up with their plans to buy a home in Portugal, or pay attention to other opportunities for obtaining a residence permit. At the moment there are not so many of them:
- opening your own business, subject to the creation of at least ten jobs for residents of the country, or investing more than 350 thousand euros in an existing business, subject to maintaining/creating five jobs;
- investments in the amount of 250 thousand euros in objects of historical, cultural or natural heritage in order to maintain them in proper condition;
- funding of scientific research in the amount of over 350 thousand euros;
- purchase of shares in an investment or venture fund for an amount exceeding 350 thousand euros;
- transfer to a Portuguese bank account in the amount of at least 1 million euros.
The local government believes that such changes will force foreigners to pay attention to other options, although representatives of real estate agencies operating in Portugal do not share such optimism. According to the latter, citizens of other countries are more likely to be interested in similar programs that are offered on more favorable terms by their main competitors – in particular, Greece and Spain.