Portugal’s Golden Visa Program, which was launched in October 8th, 2012, owes a big portion of its success to the real estate investment option. Until 2020, Portugal Golden Visa Program received more than 94 per cent of its investments under property investment option. Although the program contributed greatly to the country’s economy and its construction sector throughout global recession periods, it has some setbacks, too, especially for the local communities.
In the end of January 2020, there was a proposal to allow the Portuguese Government to potentially change the terms of the Golden Visa Program; the matter is to be discussed in sub-committees within Parliament in February 2020. The potential change would allow the Government to implement changes to the Golden Visa regulations, namely, to stop the option of real estate investment into Lisbon and Porto for Golden Visa Investors, and to only approve applications that invest in interior parts of the country, or through other investment options.
High Growth in Metropolitan Property Prices
During the past six years there has been substantial investment into the major cities of Portugal, particularly into Lisbon and Porto. Lisbon single-handedly generated almost 340 million euros in just the first half of the last year with its real estate market and its foreign community. Potential investors, looking for long term investments and profits, choose to invest in these bigger cities to be able to gain some returns for their initial investment.
However, for two simple reasons, this growth in the property market started to push locals out of cities. The government is therefore cautious about the speed of growth in the property market and would like to slow it down. This measure will not stop the market from growing but will slow it down to a more manageable rate, helping locals living and working in these city centers.
Timeline for the Changes
This regulatory change is not something that can happen overnight. The earliest any new legislation may be in place would be a couple months from now and still; there will need to be several discussions to ascertain how they will make the changes and the exact areas that will be affected. The specific legislation will then need to be approved and the existing Golden Visa Program regulations will need to be amended. It is likely that this process will take further several months, however, it is difficult to provide a timeline as there are no specific details of what will change and when.
In the meantime, we will be monitoring the process closely to understand the potential new legislation in more detail. One thing to take notice of is that the spokesman for the proposers of this legislative authorization has already stated that “this action will not be retroactive”, so if you have an application already in with SEF, there is no need to worry even if you don’t have your approval through at the moment.
How to Prepare for the Change
Our advice moving forward is if you’re still looking to apply for Golden Visa through property investment in one of the City Centre’s of Portugal, then you should buy a property that has all of its licenses in place, or one that allows you to sign deeds immediately. Then, submit your application at the earliest opportunity to avoid any issues when the new laws come into place.