In light of recent developments, we wanted to give current and prospective investors an idea of what to expect if and when the changes to Portugal’s Golden Visa are enacted.
Perhaps Europe’s most popular and lucrative residency by investment initiative, Portugal’s Golden Visa program was launched in 2012 at the height of the country’s recession.
The Portuguese government introduced the residency by investment program in an effort to attract capital from international property buyers and other investors. The idea was that these investments would give a much needed boost to Portugal’s economy and real estate market.
Since its inception nearly a decade ago, the Golden Visa program has been a remarkable success. By the end of 2019, the program had granted residency to more than 7,500 non-Europeans and generated €4.6 billion EUR ($5.2 billion USD as of March 20, 2019).
By drawing a steady flow of investment—especially into the real estate market—the Golden Visa program has helped fuel massive growth in Portugal’s property market. Unprecedented international investment growth, the flourishing export market, and skyrocketing tourism rates have all contributed to Portugal’s inspiring economic turnaround.
The Portuguese Golden Visa—also called the Autorização de Residência para Atividade de Investimento (ARI) or the Golden Residence Permit Program—allows non-European citizens and eligible family members to acquire permanent Portuguese residency and other benefits in exchange for a qualifying five-year investment in Portugal.
These are some of the most compelling benefits of the Golden Visa program:
After establishing yourself as a resident through the Golden Visa program, you are able to apply for non-habitual resident status. As a non-habitual resident, you are relieved of paying taxes on foreign-sourced income like self-employment, investment income, rental income, capital gains, and more.
And there are additional benefits associated with achieving non-habitual residency. NHR participants enjoy a tax exemption for gifts or inheritance to direct family members. And as a non-habitual resident, you are able to earn Portuguese-sourced income taxed at a special fixed rate of 20%.
On February 5th, 2020, Portugal’s parliament approved its 2020 budget—a budget that included proposals to make significant amendments to the Golden Visa program.
One of the primary goals behind the proposed changes is to drive investment in rural parts of the country—rather than prime areas—and reduce real estate price inflation in major cities such as Lisbon.
Currently, investors can qualify for the Golden Visa program with an investment of at least €500,000 in real estate anywhere in Portugal.
Under the proposed changes, eligible real investments would be limited to areas in the interior of Portugal, thus making Lisbon and Porto ineligible for Golden Visa-eligible real estate investment.
It is important to note, however, that the approval of the budget doesn’t necessarily mean the proposed amendments will be implemented. The government is authorized to make changes under the new budget, but they may choose not to—which is likely considering the torrent of complaints after the budget was passed.
The good news for investors with real estate in Lisbon or Porto is that these changes will not impact existing investments. In other words, if you have already obtained a Golden Visa with a purchase in Lisbon or Porto, you will not be affected.
In addition, the proposed changes will not interfere with your ability to renew residency permits that have already been granted or the issuance or renewal of residency for eligible family members. Also your non-habitual tax residency status or potential to apply will not be affected.
But given the likelihood that some or all of the proposed changes will be enacted, if you want to make an investment in a major Portuguese city like Lisbon or Porto and be eligible for a Golden Visa, you’ll want to do it now. There is no guarantee you’ll be able to do so in the future.
One way to secure your Golden Visa now while profiting from Portugal’s tourism boom is by investing in the luxurious Casa do Cativo boutique hotel.
This beautiful cash-flowing asset is located in the heart of the historical center of Porto, and it has a 9.9 out of 10 rating on Booking.com.
Complete the fields below and someone from our investment team will be in touch with more information about this incredible opportunity.