Portugal’s Golden Visa program is just over a decade old and seemingly coming to a close. In retrospect, the program has certainly accomplished what it originally set out to do—attract foreign capital and boost the Portuguese economy. More than 30,000 foreign nations have acquired residency in Portugal since 2012 raising more than €6.8 billion ($7.3 billion) in foreign investment. The program has been undeniably golden for the Portuguese economy. However, the Portuguese government is now citing the current housing crisis as a justification to pull the plug on the whole thing.
In 2022, the government introduced restrictions to the program which meant that residential property investments in the major major cities of Portugal were no longer Golden Visa eligible. Since the golden visa investors have been limited to purchasing commercial property in Lisbon, Porto and most of the Algarve. Alternatively investors can purchase homes in the low density areas.
This was done in part to mitigate the situation of rising house prices, but it apparently wasn’t enough. On February 16th, Portuguese Prime Minister Antonio Costa, announced plans to end the Portugal Golden Visa program. The announcement has caused a panic of confusion as the details were unclear.
Since then there has been an extreme surge of new applicants hoping to submit and process applications on the cusp of cancellation.
Now let’s put the rumours aside an explore exactly what is going on.
Is the Portugal Golden Visa closed already?
No, First and foremost, the Portugal golden visa program is currently still open. The law has not changed and applicants are able to file golden visa applications and begin the process. However, crucially, time is of the essence.
At the moment nothing has officially been changed or finalised. However, the announcement made last week was a clear state of intent from the Portuguese government. They will soon draft a bill to end the golden visa. Discussions in parliament have been taking place since 16th February and will continue until March 16th. Meanwhile during this phase immigration attorneys, real estate developers and global mobility advocates will be pushing to keep the golden visa program open in its entirety, or at least come to solution more appeasing to all relevant stakeholders. After public hearings are complete, the proposal will go for revisions and a final draft. Then parliament will then vote to ratify the existing law.
What does this mean for potential investors?
- Those who submit a file before the new law comes into effect will surely be grandfathered into the program.
- At this stage it is recommended that investors avoid residential property investments and instead opt for commercial property investments such as hotel projects, office space or touristic apartments. This is largely due to rumours that the government will impose new conditions on golden visa renewals if the investor has purchased residential property but is neither living in the property no renting it out on long term. This would be part of a clamp down on short term rentals like Airbnb’s.
- These changes will not be immediate. There are lots of steps involved for the government to implement such a law change.
- Our legal partners have suggested that even in the worst case scenario the program cannot be closed until the end of May.
- There will likely be a transition period which could give investors until the summer or possibly even the end of the year to submit their golden visa applications for pre-approval.
- Investors should have at least 30-60 days remaining to make an eligible investment and submit their initial application. Our legal partners are recommending that investors proceed as soon as possible to ensure that they are golden visa eligible and avoid being at the back of the line of the backlog that could be created as a result of so many clients trying to proceed before the program is officially closed.
- The law firms are working with Portuguese banks to shorten the time to open accounts as a way to relieve time.
- To minimize the risk of investors, most lawyers are now reducing the amount of legal fees that the client needs to pay upfront allowing them to pay just for the tax representation and bank account opening process with the remaining balance due on submission.
- While highly unlikely, it is recommended that new applicants invest into a property where the seller/developer is offering a full refund in the case that their golden visa application is denied due to a cancellation / change in the program.
Golden Visa Renewals
It seems unlikely that the government will implement changes that require golden visa investors to meet certain conditions in order to renew their residency permits. However, if this did happen then only those that invested in residential property would be effected. The clause would require that golden visa holders use their residential property either as their main residence in Portugal or acquire a long term tentant to rent the property. In this case investors with properties designed for Airbnb or short term lets could face issues.
Developers of such projects are already adapting and finding ways in which their properties could instead serve as long term rentals. However, with this uncertainty it is highly recommended to instead invest in commercial real estate at this stage. Obviously the visa holders can’t be expected to reside in a commercial space. Beyond this, most commercial real estate developers are adding a clause to agreements to refund investors in case the applicant doesn’t qualify due to Golden Visa program changes.
Want a Portugal Golden Visa? Act Fast or go for an alternative!
Lincoln Global Partners can help you move quickly and secure a Portugal golden visa before time runs out. While there are other pathways to acquire Portuguese residency, the Portugal is the only country in the European Union with a Golden Visa program in which one can acquire citizenship without the need to physically live the country.
Those interested in residing in Portugal full time can also consider the D7 passive income visa, the D2 Visa or even a Digital Nomad Visa. Each of these routes require a stay of at least 6 months per year in order to meet the minimum residency requirements. So, consider your options quickly. Otherwise, we can help you with another Golden Visa option outside of Portugal.
Contact us asap to find the solution that fits you.