This year witnessed a turning point for the Portugal Golden Visa program as the long-awaited changes took effect. As of January 1st, the real estate acquisition route has been limited to certain areas, while the minimum investment amounts for most other routes, such as capital transfer and fund investment, have increased. Investor demand had already increased when the announcement was first made in early 2021. But in November and December, as applicants rushed to complete their applications, the applications skyrocketed. Still, some investors will need to make it under the new regulations.
Current Portugal Golden Visa prospects are only able to buy a residential property in designated interior areas as a result of the changes. As the residential property option in Lisbon, Porto, and the majority of the Algarve is now taken out of the equation, the investors who want to buy a house in the country turned their attention to interior areas. Aljezur and Monchique are two popular spots where most investors have already started their search. The beautiful Douro Valley is in the spotlight too.
Commercial Property Investment Rises Although buying residential property in Lisbon, Porto, and most parts of the Algarve region will not qualify investors for a Portugal Golden Visa, buying commercial property in these same locations is still an option. Those who don’t want to compromise from these hot spots lead to an increase in their quest for commercial properties. Considering the growing popularity of Lisbon as a digital hub for both companies, top talent, and digital nomads, a commercial property investment might turn out to be a profitable investment, along with Portugal Golden Visa benefits.
Investment Funds Are Here to Stay The fund subscription investment amount increased to €500,000 from €350,000 with the new regulation. This may appear to be a significant increase, but when compared to other residency by investment programs in Europe, it is still a reasonable amount. Portugal Golden Visa funds were already popular in 2021. But, some investors did not want to rush their application under the old rules so that they could analyze the funds, vet the fund managers, and assess the risks and returns more carefully. As investors become more confident with this route and the fund market grows. We’re waiting for new funds to be introduced to the market through CMVM, which will make the market more competitive.
Less Popular Investment Options Might Come Forward The most common methods to a Portugal Golden Visa are real estate investment and fund subscription. Other, less popular investment options, on the other hand, may become utilized once the changes are fully digested. One of these methods is a €250,000 donation to the preservation of national heritage in Portugal. It may be appealing because the investment amount lower than other routes. Still, I don’t think it can substitute a real estate investment or a fund subscription because it’s a “donation” that doesn’t guarantee a financial return.
Increased Mobility Will Attract New Investors Most investors who completed their Portugal Golden Visa in 2021, were already familiar with Portugal. Once – and hopefully – the pandemic slows down this summer, Portugal will welcome visitors from all around the world, who will set foot in the country for the first time. As global mobility increases, the investors’ appetite for Portugal will see a rise too. This is especially going to be the case for Americans, Australians, and Canadians who have not been able to travel and do proper research or house hunting.
The Bottom Line As I’ve explained, Portugal Golden Visa is still a favorable method for those who are looking for a solid Plan B in an EU country. The changes may have an effect “for a short while”, but the program is still almost unmatched, thanks to its low stay requirement only 14 days on average per two years, and its direction towards citizenship – only after five years.
(By Charles Taylor Harris)
(Photo by Richard Hewat)
