Portugal will no longer grant residence permits to wealthy property buyers. Officially, this is explained by the tense situation on the real estate market.
Five hundred thousand euros for a residence permit in the Schengen area of the EU, that was the Portuguese government’s offer to rich foreigners since 2012. Anyone who invested half a million euros in Portugal could get a residence permit called a “golden visa”. and this was used by around 12,000 investors who were able to come to the EU with their families. Now that should come to an end, among other things due to EU pressure. Portuguese Prime Minister Antonio Costa announced that the “Golden Visa Program” will end on March 16, 2023, reports DW.
“It’s good that golden visas have finally been abolished, they should never have been introduced,” says former Socialist member of the European Parliament Ana Gomes, who has fought against the program since its introduction. “They were an invitation to money laundering and allowed criminals and terrorist organizations to legally infiltrate the Schengen area.“, she added. More than half of the applicants come from countries where there is a particularly high risk of money laundering, and Portugal has never taken into account the origin of the applicants’ money.
Good job for realtors
What was announced as a program to stimulate the Portuguese economy, which was then in a disastrous state, turned out to be, above all, good business for real estate agents. Instead of opening new companies and jobs, luxury apartments in Lisbon and the surrounding area were primarily bought by rich Chinese, followed by Brazilians, Turks, South Africans and Russians. Of the total investment of about seven billion euros, almost 90 percent went to the purchase of apartments.
Only 22 visas were issued for job openings, according to police data for SEF foreigners. The result is a modest 280 new jobs in ten years. Despite this, the president of the Portuguese Association of Realtors, Ugo Santos Ferreira, criticizes plans to abolish the “golden” residence permit. “It is an attack on all foreign investors who want to invest their money in Portugal. Portugal is losing its money, credibility and good reputation as a country suitable for investments, and Portugal is needed foreign investors to strengthen its economy, it cannot give up an important instrument, which brings the country more than 600 million euros every year,” he says. “In addition, the program has created thousands of jobs in the construction and real estate sectors,” claims Santos Ferreira.
Crisis on the housing market and money laundering
But the problem arose precisely in these sectors. In recent years, housing prices in Portugal, especially in the two largest cities of Lisbon and Porto, have exploded. This was also influenced by golden visas, critics say, but also by the fact that more and more EU citizens bought houses and apartments in Portugal at prices that the Portuguese can no longer afford.
“Especially in the case of more luxurious apartments and houses, gold visas caused a big price rise”emphasizes former member of the European Parliament Ana Gomeš. This is the argument that is now accepted by the Portuguese government to explain the reason for the abolition of golden visas.This is an excuse, according to Ana Gomes, because increasingly harsh criticism from the EU led to the suspension of Portugal’s golden visa program. Especially because of the often dubious origin of the applicant’s money. Because, since the beginning of the war in Ukraine, Russians are prohibited from investing in Portugal. Thus, they are excluded from the possibility of obtaining a golden visa. But neither China nor Vietnam is characterized by transparency, says Gomes.
The president of the Association of Realtors Ugo Santos Ferreira, on the other hand, points out that all transactions in Portugal are the most strictly controlled. There are black sheep everywhere, he says, but that is no reason to abolish the golden visa. “Nobody wants to abolish banks completely, even though it is known that money can be laundered there too.
What will happen to those who received golden visas?
Although Santos Ferreira is still hoping that the government will at the last minute abandon the abolition of the golden visa and offer it in some other form, the investment of €500,000 as a ticket to the Schengen area in Portugal seems to have come to an end. “It was simply too non-transparent and dangerous,” says Ana Gomes.
It remains to be seen what will happen to those who received golden visas. According to DW, their residence permit should only be extended if they actually live permanently in Portugal.
(WORLD)