If you are considering obtaining Portuguese residency (and consequently a free pass to the European Union) through the investor visa that the country offers, you may need to reconsider your plans.
Portugal recently announced a robust package of measures to tackle the real estate crisis, including the end of the program known as the “Golden Visa”.
The Golden Visa is considered one of the most attractive ways to live in Europe. Many Brazilians have already benefited from it, gaining not only the right to residency but also Portuguese nationality.
Similar to the EB5 visa in the United States, non-European citizens who make investments in the country can apply for a special residency authorization. The most common investment is the purchase of a property, which can be for personal residence or for long or short-term rental.
But some politicians criticize the program for driving up property prices and making housing unaffordable for many segments of the population. According to them, low wages, a booming real estate market, policies that encourage wealthy foreigners to invest, and an economy reliant on tourism for years have made it difficult for local residents to rent or buy homes.
The current inflation rate of 8.3% in Portugal has exacerbated the problem. Rents and house prices have skyrocketed.
To combat real estate speculation, Prime Minister Antonio Costa announced that he will “suspend the issuance of new gold visas.” Foreign property buyers wishing to renew their existing gold visas will only be eligible if their properties are used as personal residences or if these units are placed on the long-term rental market, he said.
The gold visas of Portugal were created a decade ago for non-European Union citizens as part of an effort to inject more money into the country’s economy and help fix public finances after a bailout loan from the EU and the International Monetary Fund. Since then, the country has raised € 6.8 billion (US$ 7.3 billion) from the program.
Chinese citizens represent almost half of the 11,628 residency permits granted by the program. Until now, gold visa applicants were required to make a real estate investment of at least € 350,000, create at least 10 jobs in Portugal, or transfer € 1.5 million to the country’s banks.
Source: Bloomberg