Portugal will put an end to its Golden Visa program for new foreign property buyers, in an effort to address the lack of affordable housing in one of Western Europe’s poorest economies.
To fight real estate speculation, Portugal “will eliminate the issuance of new golden visas”, Prime Minister Antonio Costa said at a press conference in Lisbon following a cabinet meeting.
Foreign property buyers wishing to renew their existing Golden Visas will only be admitted if their property is used as their own home, or if these units are placed on the long-term rental market, said the Portuguese premier.
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Golden Visas: The Portugal Program
The Portuguese Golden Visas were conceived a decade ago for non-EU citizens as part of an effort to fix the country’s public finances after the 2011 bailout by the EU and the International Monetary Fund.
Since then, the country has raised 6.8 billion euros ($7.3 billion), 90 percent of which went to real estate, according to the Portuguese Immigration and Border Service.
I Chinese nationals accounted for nearly half of the 11,628 residency permits granted under the program, which has been increasingly popular with US investors.
Until now Golden Visa applicants had to carry out a real estate investment of at least 350,000 euroscreate at least 10 jobs in Portugal or transfer 1.5 million euros.
Variants of the Golden Visa have been adopted across Europe and in countries around the world, from the United States and Canada to Spain and Greece.
Visas tend to last until a critical mass of opponents conclude that the costs – soaring housing prices, absentee homeowners and corruption allegations – they outweigh the benefits and politicians abandon them.
In Portugal, some politicians have criticized the programme, for driving up property prices and making housing unaffordable for many segments of the population.
EU officials pointed out the potential risks of tax evasion and money launderingor by international buyers.
Back in November, Prime Minister Costa had indicated that the government could put an end to the golden visas, saying the program was “no longer justified”.
In 2021, his government had started limiting permits and to exclude real estate purchases in cities such as Lisbon, where house prices have more than doubled since 2015 to 3,805 euros per square metre, according to real estate website Idealista.
But Paulo Silva, head of the real estate consultancy Savills in Portugal, doesn’t fit. The businessman recalled that the Golden Visas helped attract foreign investors to the country when it needed money a decade ago, adding that today they represent only 3% of real estate transactions.
“It is a mistake to blame Golden Visas for the increase in property prices, as this is mainly due to an imbalance between supply and demand“Silva said. “The end result is that investors will take their money and invest in another country where they can get a golden visa.”