Since this is the last blog of the year, we would like to take this opportunity to wish all of you Seasons Greetings, Happy Holidays and a very Happy New Year. Here is hoping that 2022 is a better year for all of us and our families.
On to the business at hand. Certain laws governing the eligibility and approval process to obtain a Residence Permit for Investment (“Golden Visa”) are set to change. The legislative amendment on the qualification of investments, (published in Decree-Law No. 14/2021 of February 12, 2021), will enter into force on January 1, 2022. Therefore, we would like to update you about the upcoming changes, especially those that will impact real estate investments, and look forward to assisting you with your respective objectives.
The changes are fundamentally based on two points:
- The increase in minimum amounts for certain types of investment. This change does not adversely affect investment in real estate
- Residential real estate investments will be restricted to the Azores, Madeira and the hinterland/interior.
I hasten to add that these changes will not adversely impact pending applications that are already in the system by December 31, 2021, or existing Golden Visa holders undergoing their respective terms and renewal processes.
The most popular mode of investment to obtain the Golden Visa is through the purchase of property. More than €6.00 bn has been invested in Portugal since the commencement of the Golden Visa scheme in October 2012, 90% of this amount is in property primarily in Lisbon and its suburbs including the coast. Similarly, but to a lesser degree, investments have trickled to Porto (and its suburbs) and the Algarve.
The rationale that has been adopted in determining the new law by the Government of Portugal (“Government”) is that it is interested in improving access to and the well-being of areas that have not benefited from Golden Visa investments since inception of the program. Therefore, the Government aims to generate economic and demographic balance by promoting investment in the Azores, Madeira and the hinterland/interior.
The amount required for investing in residential and commercial real estate has not changed. The minimum requirement remains at €500,000 and €350,000 (this is a more complicated process). However, purchase of residential real estate to obtain a Golden Visa is going to be restricted to the Azores, Madeira and to certain territories of the interior.
Finally, due to these changes real estate investment funds are a viable alternative to investing directly in real estate. Foreign investors remain eligible to obtain the Golden Visa by investing in real estate funds. Through such investments they can take participate in areas where funds can invest, such as the coastal strip and metropolitan areas of Portugal, without resorting to direct investment in residential properties in these regions.
We are here to help you with your requirements. Being a one-stop shop we allow you, our client, to optimize your time and resources and assist you to navigate the complexities throughout the Golden Visa process. Therefore, if you require any assistance with either other modes of investment or the types of properties that can be purchased in the urban metropolitan areas, please get in touch with us by pressing the WhatsApp button on the home page.
The Lovely Panoramic family wishes you and your families a fantastic, successful and healthy 2022!
Founder and CEO
December 22, 2021