As of February 12th, 2021, The Portuguese Government finally announced long-anticipated changes to the requirements for investors looking to take advantage of the Portuguese Golden Visa program. As part of the decree-law no. 14/2021, the most fundamental changes rescinded the opportunity to invest directly in real estate in highly populated areas such as Lisbon, Porto, and the coastal regions, with the idea of placing increased emphasis on real estate investment in the autonomous regions of Madeira, the Azores, and inland Portugal.
In other words, the Portuguese Government is now directing investments away from highly populated areas into less densely populated areas in order to ensure restoration and rehabilitation of real estate is not confined to its metropolitan and tourist centres. It is also hoping to “spread the wealth”, so to speak, in order to ensure investment in the country can benefit its less affluent municipalities and parishes.
However, a perhaps less anticipated and more significant amendment was placed on the investment route to accessing the Golden Visa, a more cost-effective and less complicated process than that of conventional real estate investment. While this route remains available for Golden Visa applicants, it too will change when the new legislation comes into force.
Previously, for anyone seeking to invest in real estate associated venture capital funds. in Portugal, the investment was €350,000—a significant reduction of the €500,000 required for direct real estate investment. Now, investment related to the venture capital funds route will also be increased, with a capital of €500,000 required to access the Golden Visa program but only after 1st January 2022.
Despite this increase, anyone interested in investing in Portugal using venture capital funds can still benefit from high-quality developments in Lisbon and Porto, both of which remain exciting and promising property markets with the potential to deliver significant returns on your investment. This is in contrast to the direct real estate investment route to the Golden Visa that will be removed from the scheme.
This is significant news for anyone considering applying for a Golden Visa in Portugal, substantially increasing the minimum investment required to apply. However, for those in a position to invest now, the good news is that these new rules will not come into force until January 1st, 2022—giving investors plenty of time to take advantage of a lower bar to entry and the numerous benefits associated with the Portuguese Golden Visa.
What the New Rules Mean for Golden Visa Investors in Lisbon and Porto
Despite the rising barriers to investment, there is still some good news for investors who want to take advantage of the healthy real estate markets in Lisbon and Porto. In short, investments in Lisbon and Porto through venture capital funds will still be permitted, giving applicants access to two of the most promising property markets in Portugal, where house prices continue to rise and rental prices remain strong.
Additionally, it is worth noting that, even despite current pandemic restrictions and concerns, the market in Portugal continues to grow, with a healthy 5.9% increase through 2020. This puts house prices in the Lisbon Metropolitan Area at an average of €3,017 per m2, while the housing market in Porto rose by a significant 11.6 percent.
In fact, property prices in Portugal have soared in the last decade, and with increases continuing despite today’s unprecedented challenges to travel, tourism, and the global economy, there seems little to suggest that this trend will change over the next decade. The future looks bright for Portugal, and Lisbon and Porto will always lead the way with safe investments options and with high returns.
When Should I Apply for a Golden Visa in Portugal?
The short answer to this question is now!
Originally, all of these amendments to the Portuguese Golden Visa program were supposed to be implemented in 2021, however, the Portuguese Government has extended this deadline to January 1st, 2022. This means that any application submitted before December 31st, 2021 will remain eligible under the conditions of the previous program.
The Portuguese government also stresses that these changes do not prejudice the possibility of renewing or granting renewal of visas for family reunification when the residence permit for investment has been granted under the current law. Put simply, if you have already applied or been granted a Golden Visa, you will not be required to put up more capital to access benefits for your family or renewing residence permits.
Having said this, beginning your application today will ensure you are fully prepared for the cut-off date, safeguarding your benefits and allowing you the opportunity to take advantage of the lower €350,000 investment fees using the venture capital route. The bottom line is, gathering all of the documentation and information you require to apply for your Golden Visa takes time, and beginning your application now will give you the best opportunity to take advantage of the existing conditions.
For information and access to the Portugal Golden Visa process, with expert advice on venture capital funds in Portugal, Planeur is available to discuss the latest changes and how they may affect your application. Our experienced advisors will guide you through the application and address your specific requirements. Contact Planeur today to find out about the services we offer and to discuss your requirements.