The first Golden Visa program was launched in Portugal on October 8, 2012. As Portugal’s real estate market lost its value, Portugal Golden Visa had been introduced to bring new funds. Portugal’s Golden Visa is offered in accordance with the Ministry of Foreign Affairs through AICEP (Department of Consular Affairs and the Portuguese Trade and Investment Agency).
According to the report of The Global Residence and Citizenship Programs 2017-2018, Portugal’s Golden Visa Programme is the world’s best residence by investment program. It is the third consecutive year for Portugal to be announced to have the top residence by investment program across the planet. The report uses ten indicators, namely: citizenship requirements, compliance, financial requirements, processing time and quality of processing, quality of life, reputation, taxation, time to citizenship, total costs, and visa-free access. From all these indicators, Portugal’s program achieved 79 points out of 100. Portuguese residency allows free travel within the Schengen countries and it may lead to Portuguese citizenship after five years of participating in the program.
Relevant Investment Options of Portugal Golden Visa
The investors may choose to invest in Portuguese property of at least €500,000. They may want to invest as an individual or as a joint legal entity. If the property is in a “low-density area”, minimum requirement gets reduced to €400,000.
Real Estate and Rehabilitation
Investors may choose to invest in Portugal property that requires rehabilitation and restoration. In this case, the minimum requirement decreases to €350,000. The property either has to be built more than 30 years ago or has to be located in a designated area of urban rehabilitation. If the property is in a “low-density area”, minimum requirement gets reduced to €280,000.
Property Renovation Option of Portugal Golden Visa
To be able to use the property renovation option of Portugal Golden Visa, investors must make sure that the project gets approved by the Town Hall (Camara Municipal). The subject property should be confirmed at the Town Hall through the property owner or an architect.
The Golden Visa investment in this option involves the property price and the ex-VAT cost of the contracted renovation works. Other expenses such as assistance fees, government fees and taxes do not count towards the investment amount.
280,000 Euro Option of Portugal Golden Visa
Portugal Golden Visa Program has several investment options, as mentioned above. Economically most advantageous one of these options is the 280,000 Euro option. However, this is only a short term advantage, because more expensive options in more accessible areas tend to yield better returns in the long term process.
According to the Golden Visa rules of Portugal, 280,000 Euro option of the Portugal Golden Visa is available only in lower-density areas. In order to incentivise investments in these areas, the minimum investment value is decreased by 20%. Therefore, if the applicant chooses to invest in a property that is designated for rehabilitation, they get 20 per cent off of the minimum investment requirement, which is 350,000 Euro. When the 20 per cent discount is applied to this, the result is 280,000 Euro.
Lower density areas are designated according to the population of the region. If the area has less than 100 inhabitants per square metres, it is considered a lower-density area. Another criterion of this is the gross domestic product per capita which qualifies a region as a lower density area if it is below 75 per cent.
Since more popular areas offer the better potential of returns, people usually consider Lisbon or Porto as better investments. Yet, the 280k option is almost half the price, and this value is quite attractive for lower strata investors. The main aim of this price reduction is to attract investors to less accessible areas in the first place, and these places are by no means undesirable.
The Most Popular Lower Density Areas in Portugal
Many neighbourhoods like Alentejo, Viseu, Évora and Beja are both popular spots among tourists and offer affordable property prices. The most popular such areas in the country are: Faro, Viseu, Santarém, Leiria, Braga, Aveiro, Viana do Castelo, some neighbourhoods of Porto, and Coimbra.
Advantages of the Lower Density Areas
The lower capital required for investment in these areas gives more freedom to the investors in their business affairs. Away from the overwhelming crowds, these areas of Portugal are great for new beginnings. Also, a lot of these areas are popular among tourists of different kinds for their versatile nature. The inner cities of Portugal are getting more and more popular among students. As the youth population increases in these cities, the need and opportunity for catering to them intensify. New investors can easily take advantage of this need in their business affairs. Finally, people who choose Portugal as their retirement residency might like these places better because of their calmness and lower costs of living.
Find out more about the Portugal Golden Visa Program