The government decided to leave the changes to the programme on 'stand by' during the pandemic, but now wants to have the bill ready by the end of the year 2020.
The end of issuing so called "golden visas" in the metropolitan areas of Lisbon and Porto, which was approved in detail following a proposal to amend the State Budget for 2020 (OE2020), will finally becomea reality later this year. The decision to change the rules of the scheme (in major urban centres) which has been the driving force behind real estate investment in recent years has been delayed because of the pandemic, but the government wants to have the new bill ready by the end of the year.
Prime Minister António Costa will have given clear instructions to comply with what was detailed in the State Budget for 2020, according to a report in Jornal de Negócios. In practice, the granting of Residence Authorisations for Investment Activity (ARI), as the golden visa programme is officially known, to property investments made by foreign citizens is now limited to municipalities in the interior or autonomous regions of the Azores and Madeira.
The minimum value of the required investments will also be increased, according to the same report: the law now requires the acquisition of real estate with a value of 500,000 euros or more, or the purchase of a building over 30 years old, located in an urban rehabilitation area and which will be renovated, adding up to a total of 350,000 euros. It should be noted, however, that investments in research activities or support for artistic creation, or the creation of jobs, may continue anywhere in the country.
Experts in the sector want the Government to rethink
Experts in the sector, however, are continuing to ask for caution regarding changes in this law. At the beginning of the year, soon after the plans to end golden visas were confirmed, the vice-president of the Portuguese Association of Real Estate Promoters and Investors (APPII), Hugo Santos Ferreira, was aware of many promissory contracts and some deeds that had been suspended due to the decision by Parliament and a climate of uncertainty.
In the midst of a pandemic, other voices in the sector have also emphasised the importance of this investment vehicle and urge the government to reconsider. In a statement given to Dinheiro Vivo, the general director of CBRE, Francisco Horta e Costa, said that schemes such as the golden visa "could be fundamental in the recovery of the post-pandemic market". This view is shared by Patrícia Barão, who is charge of JLL's residential area, stating that the visas have been "a crucial tool in terms of capturing investment from Asia, Brazil, the US, Turkey, South Africa and a leverage that has already raised more than 700 million euros in taxes and fees for state funds.
For APEMIP President Luis Lima, the context provoked by COVID-19 "has accentuated the importance of foreign investment" and "the need to step back from the legislative authorisation provided for in the State Budget 2020 is obvious. Instead of trying to curb foreign investment, our role should be to re-engage, through programmes like these, in a strategy of recovery," he concluded.