The future of the Golden Visa programme will be decided on February 6th, when the Portuguese parliament will have a final vote on the 2020 budget proposal drawn up by the Socialist Party.
Following talks of a review of the ‘Authorisation of Residence for Investment Activity’ programme (read more here), Portuguese Prime Minister António Costa has now said it’s time to limit the incentives of the scheme aimed at foreign investors.
In a speech broadcast last week by RTP, Costa said that the Golden Visas “should contribute to the recovery of the property market where it’s necessary or in areas of low population density”. He added: “Fortunately, it’s no longer necessary in the big urban centres.”
To date, the programme has brought €4.5 billion into the real estate market, mostly in Lisbon and Porto. Now, the Socialist Party wants to restrict the Golden Visas to property purchases outside of these cities, aiming to attract investors to regions with a lower population density.
The incentives programme aimed at foreign investors has been blamed for the current speculation in the property market. The rising price of houses, particularly in larger cities, has hurt the ability of the middle class to access affordable housing, say reports.
However, despite acknowledging the effect on local residents, real estate agents fear that these curbs may prompt investors to buy property elsewhere in Europe with similar programmes.
“It’s counterproductive,” said Luís Lima, head of Portugal’s Real Estate Professionals and Brokers Association, noting that Lisbon and Porto account for more than half of all property purchases by Golden Visa investors.
In the speech, the Prime Minister added that the proposed changes will not affect existing Golden Visa holders. “Those who now want to obtain a Golden Visa are also welcome, as long as their investment is made where it’s necessary.”
If you have any questions about the Golden Visa scheme or purchasing property in Portugal, please contact the team at Algarve Home Sales here.