On the face of it, there have been some worrying headlines relating to the future of Golden Visas in Portugal of late.
If you follow stories about international property in the newspapers, you may have read that both Ireland and Portugal have scrapped them.
The detail even appeared in articles in usually reliable publications – including the Financial Times. Stories suggested Portugal wouldn’t be issuing any more Golden Visas to non-EU residents. With Brexit done and dusted, that would imply British passport holders would no longer qualify.
So, for those with plans to retire or start afresh in Portugal, this may seem a hefty blow. However, before panic sets in, we’d urge anyone with plans to move to Portugal in 2023 to take a moment to take stock.
Golden Visas were introduced a decade ago in Portugal to encourage investment in the wake of the financial meltdown which swept across the Euro zone.
At the time, the government wanted to make a property in Portugal an attractive investment for wealthy overseas buyers. In simple terms, if you spent €500,000 on a villa or apartment in Portugal, you could qualify for a residency permit for five years and permanent residency after that.
An alternative was to buy a “doer-upper” for no less than €350,000 and spend no less than €150,000 on renovations.
There were no rules on how long a buyer had to be “in country” to qualify. It was therefore unsurprising that Portugal’s Golden Visa programme attracted an estimated €6bn in investment since its launch in 2012.
However, the Government’s opposition in particular is concerned the system has now skewed the country’s property market. They argue a side-effect has been to push prices up to a level many on an average wage can no longer afford.
So, while affluent Chinese buyers may have arrived in the country in numbers – joined more recently by others from Russia and Ukraine – there are claims Portuguese buyers are being shoved aside.
As a result, it has been announced it’s time for change. However, it’s important to emphasise this DOES NOT mean an end to Golden Visas, as many articles have suggested. At least not yet.
Firstly, if you’re an EU citizen, then the Golden Visa programme remains open to you. There are still some limitations. For example the purchase of residential units in parts of Lisbon and Porto have been excluded for a little while now. The government was hoping that might attract investors to towns and cities in the interior instead.
However, it needs to be remembered the restrictions only apply to the acquisition of Golden Visas through investment in residential property. They are still available to those who invest €1.5m in a business venture in Portugal. Should you do so – and should the business prove profitable enough – there is nothing to stop you then investing in a property of your choice.
At the moment, Golden Visas also remain available to buyers investing in shops or tourist accommodation. This may change of course but, at the moment, the fine detail has not been announced – and that’s an important point.
All we have to go on right now is an announcement that change is coming. Exactly when and precisely what it will involve has not yet been clarified.
So what should I do?
So, if we had any advice for non-EU residents already part way through an application for a Golden Visa, it would be to keep calm and carry on. The government may have shown its hand with regard to Golden Visas but it’s likely to be a little while before any changes are implemented.
Nevertheless, if you were considering an application as part of your residential property purchase then we would advocate moving swiftly. It’s probably best to see the recent announcements as the final call.
But, if a Golden Visa is really your end game, then it’s important to remember residential property is not the only solution. Much the same can still be achieved through a substantial business investment or through other types of property.
As ever, if you would like more advice, we’re here to help. Just give us a call or drop us a line for more information. We can also assist with the logistics and paperwork related to moving to Portugal too.
Alternatively, feel free to browse our blog for previous posts you may find useful. If you’d like to check out our full portfolio, you can find details of properties currently on our books right here. You can also keep up to date with our Facebook page here.