On the 7th of February, the Portuguese Government approved the State Budget for 2020, which contains some changes regarding the necessary conditions for the attribution of Golden Visa (GV), as well as the tax benefits for Non-Habitual Residents (NHR).
The international press, namely the Financial Times on the 28th of January, stressed that these measures contained in the State Budget would hinder access to the Golden Visa (GV) programs, and to obtain tax benefits for Non-Habitual Residents (NHR), foreigners who live or intend to live in Portugal under these laws.
The Assistant Secretary of State to the Prime Minister, recently declared in an interview, that these changes, despite being presented in this year’s budget, should only come into force in early 2021, so as not to affect any process that has already started.
Regarding these changes, the major differences expected(1) for 2021 are: the issuance of Golden Visas based on real estate investment can no longer be carried out in Lisbon and Porto.
It is true that the vast majority of the 8000 GV’s issued since 2012, about 95% of these, were for real estate investment and the majority being in these cities (one of the reasons for the renovation of many buildings), which implied a substantial increase in the values of the real estate.
On the other hand in relation to (NHR), due to pressure from several European countries, namely Finland and Sweden, the current total tax exemption for 10 years will be changed to an annual IRS rate of 10%.Despite being a little less interesting situation, it remains a very rewarding advantage considering the 40% or more paid in the countries of origin.
Given this scenario, many investors, real estate companies, law firms and other stakeholders in these processes have already publicly expressed their dissatisfaction with that legislation.
These issues have already been discussed since November and these changes are only valid for the future, not applying to foreigners who already benefit from the GV and RNH concessions, as the law does not allow these changes to have retroactive effects.
In the case of our customers, as of last December, we were informed of this possibility of changing the law, so the contracts for the purchase and sale of the intended properties were immediately executed, the bank deposits defined by law were made and all the necessary documentation with the Foreigners and Borders Service (SEF).
Whoever does not do this in this period, and who has already defined that claim, is because he was misinformed or advised.