PORTUGUESE GOLDEN VISA: WHAT IS IT?
The Portuguese golden visa was created in 2012 to attract foreign investment during their economic recovery from the subprime crisis.
A TOTAL INVESTMENT EXCEEDING €5,604 MILLION WAS MADE IN THE GRANTING OF 11,768 RESIDENCE PERMITS (ARI) BETWEEN OCTOBER 2012 AND MARCH 2023, A SIGNIFICANT NUMBER OF WHICH WERE DONE THROUGH THE ACQUISITION OF REAL ESTATE. AS OF MARCH 2023, THE REGIME OF ATTRIBUTION OF RESIDENCE SEEM TO BE COMING TO AN END OR MAY UNDERGO GREAT MODIFICATIONS.
According to the Portugal Golden Visa statistics obtained from Portugal SEF, since October 2012, over €6,852,797,996.14 in funds was invested for the Portugal Golden Visa. Since October 2012, €6,118,130,162.55 was attributed to a real estate investment. By January 2021, Portugal generated more than €5.6 billion EUR investments from 25,421 individuals (9,381 investors and 16,040 family members).
According to Portugal’s Golden Visa figures, 1,182 applicants were granted residence permits in 2020. In the same year, 2,043 dependents also received the Golden Visa. 1,094 of these applicants applied via the real estate property purchasing route, investing €588m EUR in 2020.
In January 2023, 93 main applicants were granted Golden Visa status by SEF, and 153 family members accompanied the main applicants as dependents1. In February 2023, 130 residence permits were authorised by SEF. 87 authorised golden visas were for the real estate investment category, 43 permits were issued for the capital transfer investment option, and no permits were issued for the job creation category. Portuguese golden visa approvals reached 163 in March 2023, the highest monthly approval figure in nearly three years.
The Portuguese golden visa has aided profitable investment in real estate properties between October 2012 and today. Is this coming to an end?
In a recent article by Global Citizen Solutions, the Portuguese government announced on February 16, 2023, that it would end its Golden Visa programme. The announcement marked the start of a phase of intentions in which the government is submitting these measures to public scrutiny from a political point of view. However, to date, nothing has changed.
On 16 February 2023, the Portugal government proposed a change to the law that would end the Golden Visa programme. This proposal is in public consultation at the moment. A proposal is not the law. The Parliament is the only body that can vote to amend the law, and only the President of Portugal can ratify it. Until this happens, Portuguese law stands.
Although Golden Visas are no longer granted through the purchase of homes in Lisbon or Porto, there are still other forms and mechanisms that allow for the attribution of Golden Visas through investment in the real estate market.
The Golden Visas have not been extinct, but have been subject to changes in the rules for their attribution.
The territories allowed for the attribution of Gold Visas include some of the most attractive locations, namely in Alentejo Litoral and Algarve, where high-quality and highly attractive projects are being born for international buyers.
Hence, a foreign investor may continue to make investments by purchasing stores or offices, Investment Units in Private Equity Funds with a minimum investment of €500,000, or purchasing lodging for tourism purposes.
CHANGES TO THE PORTUGUESE GOLDEN VISA IN 2023
- The Portugal Golden Visa programme is due to be cancelled.
- The fate of current Golden Visa holders in Portugal remains uncertain as the government’s proposed changes to the programme continue to develop.
- Portugal will end golden visas for non-EU citizens.
- On 16 February 2023, the Portugal government proposed a change to the law that would end the Golden Visa programme.
EVOLUTION OF NUMBER FOR GOLDEN VISAS GRANTED IN 2012 – 2023
Source: SEF
Year | Number of golden visas |
2012 | 2 |
2013 | 494 |
2014 | 1526 |
2015 | 766 |
2016 | 1414 |
2017 | 1351 |
2018 | 1409 |
2019 | 1245 |
2020 | 1182 |
2021 | 865 |
2022 | 1281 |
Q1 2023 (Jan &Feb) | 233 |
EVOLUTION OF THE TOTAL ANNUAL INVESTMENT VOLUME PER YEAR
SOURCE: SEF
Year | Total annual investment (€) |
2012 | 2,155, 873.56 |
2013 | 304,002,774.99 |
2014 | 921,314,178.34 |
2015 | 465,259,797.63 |
2016 | 874,444,320.10 |
2017 | 844,088,897.77 |
2018 | 838,532,935.27 |
2019 | 742,455,053.29 |
2020 | 646,729,464.80 |
2021 | 460,816,183.84 |
2022 | 654,292,327.91 |
Q1 2023 (Jan &Feb) | 98,706,188.64 |
PORTUGAL GOLDEN VISA AND LISBON RESIDENTIAL MARKET: WHERE LIES THE IMPACT?
The foreign community in Portugal has been growing due to several factors. These include the good climate throughout the year, affordable cost of living, quality of transport, health, education and technology services, security, geopolitical factors such as EU membership and political and social stability. These positive arguments have contributed to the settlement of foreigners in Portugal, whether at working age or at retirement.
The pandemic has added a new purpose to settling in Portugal. The possibility of remote work and digitalisation combined with the proximity to most European capitals make Portugal strategically well-placed to domicile a profession that does not require regular office attendance. Although the resident population in Portugal has decreased in the last 10 years, INE data reveals that the resident foreign population has increased by 52%.
WITH THE END IN SIGHT FOR THE PORTUGAL GOLDEN VISA, WHAT EFFECTS WILL IT HAVE ON THE PRICE TRAJECTORY OF THE RESIDENTIAL MARKET?
According to Bloomberg, Portugal will end its so-called golden visa programme for new foreign property buyers as it tries to address the lack of affordable housing in one of Western Europe’s poorest economies. The programme has been criticised for its effect on the soaring house prices, which drives out the locals.
It is expected that the termination of the programme will lead to a decrease in demand for real estate and a subsequent decrease in prices for properties in Lisbon and Portugal at large.
Although the Golden Visa programme may have driven a price escalation in Portugal during its initial period of establishment, the residential market, especially the prime segment, has been consolidated as an investment destination. It has become attractive in price and quality compared to other global destinations, attracting nationalities from all corners of the world. The share of national buyers is also increasingly gaining market share and absorbing many new projects entering the market.
