Portuguese parliament votes against ending Golden Visa program

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In a highly-anticipated Portuguese parliamentary session this week, the legislative body rejected a proposal from the Communist Party to end the country’s popular Golden Visa program, a residency-by-investment program that brought in nearly €7 billion of investments to Portugal since its launch in 2012.

However, in this week’s parliamentary session, the majority Socialist Party rejected the Communist party proposal, with the government deciding instead to create a working group made up of the ministries of Economy, Foreign Affairs and Internal Administration, to assess the impact of the program on the country and its economy and help decide on the way forward for the program.

“This means that although the program is under revision, the Government, by itself will not be able to introduce any amendments to the relevant law during 2023,” explains Sara Sousa Rebolo, partner at Lisbon-based Prime Legal.

“However, one must note that this does not prevent the [parliament] to legislate about the program during 2023. The Socialist Party currently has an absolute majority, with a mandate until 2026, so there’s no possibility of dispute when it comes to the voting.”

In other words, all cards are in the hands of the Socialist Party when it comes to any legislation put on vote in the Parliament, including all matters and future decisions relating to the Golden Visa.

“The government doesn’t want to end the program,” says Tiago Gali Macedo, managing partner at Gali Macedo & Associates. “They just want to focus it on more productive investments like funds, companies, productive real estate, etc.”

The Portuguese Golden Visa has been incredibly beneficial to the country’s economy, explains Diogo Capela, co-managing partner at Lamares, Capela & Associados. “The Portuguese Golden Visa was created in 2012 as a response to the financial crisis Portugal was facing,” he explains. “There were numerous benefits that the program has brought to Portugal, top of them is the huge amounts invested in the country, totaling more than €6 billion of foreign direct investment so far,” says Capela.

“Since its launch, Golden Visa Portugal has had a huge support, with about 11,263 investors and 18,479 family members benefiting from it,” he adds.

The Portuguese Prime Minister’s statements on the Golden Visa 

Earlier this month, the parliament’s Prime Minister Antonio Costa had said the program is ‘no longer justified’, sparking fears that the program’s end is in sight. Is this still the case?

“I believe the Prime Minister’s statements may have been excessive, possibly the result of media pressure in the face of recent news about some cases of social support obtained by Golden Visa holders, as well as cases of real estate pressure in large urban centers,” predicts Rebolo.

“Notwithstanding, we also believe that the program must have changes and improvements, as well as a more environmental and social character as those needs are now very clear. These are also the hot matters that EU is concerning in addressing so there is room to achieve a compromise solution that allows using this instrument to attract investment as a tool to respond to these needs,” she adds.

Backlog for Golden Visa investors resolved? 

Being one of the most popular residency-by-investment programs in Europe, the Portugal Golden Visa program has been suffering a backlog that meant that new applicants can anticipate a processing time of nearly 18 months – is this going to continue to be the case in 2023?

“Currently the Portuguese Government is also moving forward with the restructuring of the Immigration Office, also adopting measure to reduce the backlog that all the immigration programs are suffering,” reveals Rebolo.

“Such improvements and measures will also solve the delay in the processing of the applications under the Golden Visa program,” she expects.

The delay of issuing the visas and processing the applications is offset by the many perks it offers, according to Rebolo, including ‘the flexibility that the program allows, by requiring only 7 days a year to stay in Portugal, without tax impact and with access to the application for Portuguese citizenship and therefore European citizenship for the investor and direct family, through different investment options starting from €200,000.

Tighter golden visa rules highlighted

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In its most recent report, for 2021, on “Migration Prospects 2022”, the Organization for Economic Co-operation and Development (OECD) highlights that since January of this year “stricter requirements for obtaining a “golden visa” have come into force in Portugal.

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“Residence permits for investment will no longer be possible based on real estate investments in Lisbon, Porto, the Algarve and on the coast. Once acquired, properties intended for housing only allow access to this regime if they are located in the Autonomous Region of the Azores and of Madeira or in territories in the interior of the country”, says the part of the report referring to Portugal.

It points out, on the other hand, that “there is, however, no change in the limit amounts for real estate investment, which remains at €500,000 or €350,000 if the building is more than 30 years old”.

“Residence applications for investment for other reasons will be subject to higher investment thresholds. The limit for capital transfers has increased from €1 million to €1.5 million”, says the OECD.

It also says that the minimum requirement for transfers for research activities, participation in investment and/or venture capital funds and the incorporation of commercial companies has increased from €350,000 thousand to €500,000.

“Continuous commitment”

The OECD points out that Portugal has had a “continuous commitment” to promoting “safe, orderly and regular” migration and says that the new version of the National Plan for the Implementation of the Global Compact for Migration is being prepared, which will take into account “best practices, but also current challenges”.

In the analysis of Portugal, the OECD also highlights the work done by the Portuguese government to minimise the effects of the Covid-19 pandemic on the processes of visa and residence permit applications, which have been suspended.

In this sense, it highlights that “all foreign citizens with pending cases at the Foreigners and Borders Service (SEF), who have submitted a request until December 31, 2021, are temporarily in a situation of regular stay in the country and have access to health, social support, employment and housing”.

 

Luxury real estate boom

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The Luxury real estate market continues with record performance over the past two years.

According to Christy Budnick, CEO of Berkshire HathawayHomeServices (BHHS): “The luxury real estate sector has shown a record performance over the last two years.

“Although the real estate market has started to normalise, the top of the market has recently seen a whirlwind of activity in the ‘Luxury Collection’, including a house in Miami (USA), sold at a record price of over of $100 million (€103 million) last week”.

This is one of the conclusions to be drawn from the 2022Global Luxury Landscape Report, recently released by BHHS. The study “explores the perspectives and trends that markets around the world are going through, from an accelerated activity – marked by record sales, bidding wars and limited stock – to a more stagnant period, in which high levels of inflation and geopolitical events will continue to play key roles in determining the market’s tonic”.

The Global Luxury Report highlights the evolution of home buying based on lifestyle choices, preferences and preferred destinations for luxury buyers, as well as which industries are putting markets on the map. Addressing even more trending topics, the report explores real estate in the metaverse, design trends, and the top nine home amenities that the luxury buyer privileges.

“One of the key situations we see as luxury real estate evolves in this new climate is that the world remains even more connected by technology and also by our changing mindset,” says Christy Budnick.

“Luxury real estate requires a global approach and I am proud that our network continues to expand and welcome the best professionals in the sector so that we can continue to offer unparalleled personalised service, driven by the BHHS brand.” adds.

Beat The Portugal Real Estate Boom

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Like practically everywhere else, the real estate market in Portugal has been volatile, to say the least. Portugal is the vacation destination for much of Europe, as well as the UK. It’s kind of like what Florida is to the US.

So during strong economic times, lots of people want to buy vacation homes and permanent residences in Portugal. Conversely, in a shaky economy, the price of new homes can fall. Right now — as COVID travel restrictions begin to loosen but there is still some uncertainty as to what the future will hold — there’s sort of an in-between period for the Portuguese real estate market.

6.27% Increase in Q1 2021

During the first quarter of this year, housing prices in Portugal increased an average of 6.27% compared to the same period in 2020. That may sound like a dramatic increase, but really it’s only because all regions of Portugal experienced significant decreases in housing prices during the COVID crisis, as well as during much of the entire previous decade.

So what does this mean for prospective vacation home buyers looking for properties in Portugal? Well, for one thing, the vacation home market is still uncertain as government officials and other European countries (as well as in the UK) continue to debate whether or not free travel can be reinstated in the wake of falling COVID cases and the rise in vaccinations. As a result, lots of buyers are taking a wait-and-see attitude until real estate market conditions can stabilize.

The End of COVID

For some buyers, however, uncertain conditions could mean there are incredible bargains available today that may not be around in a few months when the coronavirus crisis finally wanes permanently.

If you are considering a move to Portugal, BRINT Portugal has people on the ground in Portugal who can help you search for vacation homes or real estate bargains available right now. Take advantage of market conditions to get the home of your dreams in Portugal at a once-in-a-lifetime price.

Americans continue to invest in Portugal

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Investment in the purchase of real estate, as part of the golden visa program, totalled 48.3 million euros in April, of which 15.4 million was for urban rehabilitation, with Americans leading the way.

According to data from the Foreigners and Borders Service (SEF), compared to March (34.6 million euros), the investment raised through the Residence Authorization for Investment (ARI) program rose 72.5%. In April, 121 golden visas were granted (in January there were 94, in February also 94 and in March 73), of which 92 were for the acquisition of real estate (43 for urban rehabilitation) and 29 through the capital transfer criterion.

Last month, 26 golden visas were awarded to the United States, 15 to China, 13 to Turkey, 11 to India and eight to Brazil. In this period, 116 residence permits were granted to reunited family members, with a total of 393 for the year.