It’s no surprise since we already knew from last December 22nd, 2020, of the possible changes to the current legislation that regulates the issuance of Golden Visa in Portugal.
As mentioned in our Newsletters of February 19th, 2020, and January 18th, 2021, Decree-Law No. 14/2021 was published on February 12, which changes the legal regime for the granting of Golden Visa in Portugal.
The most significant change that could have a greater influence on how to obtain this residence permit (Golden Visa) and later Portuguese nationality, will only allow real estate investment in the interior areas (called “NUT III Zones”) and in the Islands. Excluding urban areas (Lisbon and Porto) and the coast, which is more attractive in terms of real estate.
This change will have major consequences for the Golden Visa Portuguese Program, as 95% of this investment was in real estate in the cities that are more attractive and profitable.
Further changes are foreseen in other areas, namely in capital transfers, investments in scientific research, in the acquisition of capital in investment funds, and in the constitution of companies in the national territory, which are not significant, as they represent about 5% of the global investment in this program, in the last nine years.
These changes come into effect on January 1st, 2022, which means that anyone who wants to make this real estate investment in the most attractive areas, within the scope of the Law currently in force, will have to do so during this current year 2021.
It should be pointed out that this time window coincides, due to the current pandemic state conditions, with a significant price reduction in property prices in Lisbon, Porto, and the coast.
GETiN has advised its customers, who are considering taking advantage of the Portuguese Golden Visa program, to make their decisions in order to be able to make investments before the end of the year.
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On the 22nd of December 2020, the Council of Ministers presented on their Official Communication the approval of a Decree-law that changes the legal regime for Investment Residence Permit (ARI-Golden Visa).
In the text presented, the 11th point states that this amendment “aims to augment the promotion of foreign investment in low-density regions, namely: in urban requalification, in cultural heritage, in activities of high environmental or social value, in productive investment and job creation.”
Lately, it has been discussed in the press, by some of the major players in this type of operation such as real estate companies, promoters, law firms). They mention the lack of timing for this government measure to be implemented.
In fact, last year, changes very similar to those already indicated were meant to start in January 2021. However, despite the Government has approved amendments to the Law, it did not regulate them. As a consequence, the 2012 Law remains in force, as mentioned in our February 20, 2020 Newsletter.
The intention to restrict the granting of Golden Visas, through real estate investment, in the amount of 500,000 euros, in the areas of Lisbon, Porto, and some on the coast, especially the Algarve, will be made progressively starting from July 1, 2021, and until by the end of 2022. Since this is a transitional period, those interested in these areas can thus continue to benefit from this Golden Visa option.
In this transitional period, the values of real estate investment required to access Golden Visas are likely to increase progressively.
In the case of foreign investors wishing to invest in the most attractive areas such as Lisbon, Porto, or coastal areas such as the Algarve, they will have to make investments that are higher than currently planned. Despite this, it should always be competitive in the “European Golden Visa Market”.
In our opinion, the Portuguese State and its economy will not be able to do without the investment achieved in the last 8 years, for approximately 5,000 million euros in real estate from Golden Visas.
As mentioned above, the changes planned last year ended up not being regulated. This year, given the state of the pandemic, the same is most likely to happen.
Although this is our opinion, the Legal Department of GETiN considers that we can only be sure when and if the entire regulation of this Decree-Law is published.
For investors, which are the main reasons for wanting a Portuguese Golden Visa?
In addition to Portugal continuing to be the third safest country in the world, the possibility to move freely in the Schengen area, to obtain nationality for an individual and their family members in the first degree, the objective is to have a plan B. Given the uncertainty of the future, whether for economic or political reasons and, now also for health reasons due to the pandemic.
In summary, Portugal, given its small size, the quality of its infrastructures, and the cost of real estate on the outskirts of large centers, continues to offer a unique quality of life for those looking for a European Golden Visa.
Note-The mentioned changes will only take effect after the law is published and its regulation in the Official Journal, Diário da República. When this happens, we will make an updated analysis.