Portugal ends ‘golden visas’ in Lisbon and Porto

This is an amendment to the State Budget (OE2020) submitted by the Portuguese Socialist Party.

Portugal ends ‘golden visas’ in Lisbon and Porto
9 March 2020, Redaction

The Portuguese parliament has approved a measure which will limit the issuance of what are known as ‘golden visas’ for real estate investments made across the Portuguese coastline, including in Lisbon and Porto. This means real estate investments will only qualify under the scheme for inland municipalities, as well as the autonomous regions of the Azores and Madeira. Last year in Portugal, 8,207 golden visas were granted 7,735 of which were through the purchase of real estate.

The measure was announced by the socialist party MP, Ana Catarina Mendes in a press conference, along with changes to income tax for foreign pensioners. She said that the end of the granting of Residence permitd for investment activity (ARI), the official name of the golden visa scheme, in the two main cities of the country "will obviously not have a retroactive application". 

The Portuguese MP continued to state that a response should be given to real estate speculation and that the amendment to golden visas to golen visas has been introduced to encourage investment in inland areas and autonomous regions and to relieve the real estate market’s pressure of areas such as Lisbon and Porto.

This means that, now that the proposed amendment to the State Budget for 2020 has been given the green light, only those who make "investments in the intermunicipal communities (CIM) of the interior and autonomous regions, as well as those who create jobs, are entitled to the golden visa", explained the leader of the Portuguese Socialist Party. 

It should be noted that of the 8,207 golden visas granted since October 2012, 7,735 were for the purchase of real estate, property with the minimum price tag of 500,000 euros, of which 463 were for urban renovation. By requirement of capital transfer, the visas granted total 455 and 17 were granted for the creation of at least 10 jobs.

Support from Portugal's other political parties

According to the Portuguese newspaper, Jornal de Negócios, the golden visa scheme has been strongly criticised by the most left-wing parties, and Left Bloc (known as BE), for example, wants to forward a proposal to eliminate these visas permanently. The most frequent accusation is that this type of visa can cover up money laundering situations. However, they have contributed to driving up property prices, particularly in the capital.

As for the other types of investment admitted by law for the purpose of acquiring golden visas, they will continue to be able to be made anywhere in the country. This is the case of investments in research activities or support to artistic creation or, even, the creation of jobs - the latter will however be subject to changes.

This change in the legislation by the socialists also appears to have the support of PCP (the Portuguese Communist Party) and the PSD (Social Democratic Party) has also said it sees the move as a positive option to direct investment to the interior of the country.

Now that the legislation has been approved as part of the 2020 state budget, the Government should implement it by the end of the year. Full details are not yet known but until the legislation is finalised, golden visa applications can continue to be made exactly as they have been until now.

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