According to a survey by the National Statistics Institute (INE) of Portugal, in 2017, 11.5% of the properties traded in Portugal were acquired by non-residents. This data reflects a steady growth in demand from foreign investors in the niche since 2013.
Although much has already been discussed about the 2008 crisis in the USA and its consequences in Portuguese lands, the truth is that, until the end of 2011, the country’s government was still fighting instability in all economic sectors. But changes started happening when, in 2012, a series of state measures were adopted, such as the creation of the Golden Visa, giving greater openness and stimulating the entry of foreign capital. For this reason, the Portuguese economy – currently recovered from the 2008 bubble – presents a very promising market for investments in real estate.
In less than 10 years, Portugal has renewed itself and has become an important center of technology and is reaping the rewards of significant government investments and major advances towards a promising future. For those who want to ride this wave, there are several incentives: from ease in acquiring visas for those who want to invest, facilities for starting companies and obtaining financial resources. When installing a company in the country, the way to Europe is automatically opened and the market expands. The acceptance of the deal by an important European entity endorses it and prepares it for escalation in the rest of the continent.
In addition to financial security, Portugal offers some benefits to foreign investors in the real estate sector. The transfer of fiscal residence is a possibility authorized to non-residents since 2009 by the Portuguese government. Once approved, the visa is valid for 10 years.
Advantages of living and investing in Portugal
The greatest benefit of the RNH is the exemption from taxes on income and investments from the foreign holder’s country of origin. Thus, for example, income from property rentals in the investors country of origin, is not taxed by the Portuguese government under such conditions.
For the third year in a row, Portugal was considered the best destination in the world by the World Travel Awards. In total, there were 39 awards of what is considered as the Oscars of international tourism,and the country was also considered the 3rd safest in the world by the Global Peace Index.
Combine these highlights with beautiful landscapes, ease of transportation and a mild temperature compared to other countries in Europe: this makes it easy to explain why properties in Portugal are in high demand.
Created by Law no. 29/2012, Gold Visa is a specific visa that can be requested by property investors located in Portugal. When approved by the government, foreigners are allowed to live and work in the country for 1 year, being able to renew twice. The law establishes some requirements for granting a visa, such as the minimum purchase value of the invested asset. In this sense, only owners of houses that are valued at at least € 500 thousand euros, if located in urban centers, or € 350 thousand euros, when located in rehabilitation areas are eligible for the migratory application.
But a State Budget Law for 2020, approved by the Assembly of the Republic in February 2020, authorizes the government to introduce changes to the gold visa program. This law, however, will still to be promulgated by the President of the Republic, proposes that the minimum real estate investment of 500 thousand euros to obtain the “golden visa” be done no longer in Lisbon and Porto, but in the interior of the country. The measure aims to promote investment in inland cities and autonomous regions, while at the same time relieving pressure from the real estate market in coastal regions, especially in Lisbon and Porto.
Safer way to invest in the sector
Gold Visa and RNH are just some of the great advantages of investing in the Portuguese real estate market. This is because the current scenario of economic stability and the steady increase in the flow of tourists in the country indicates the high profitability of investing there. Having the assistance of a real estate broker that is local guarantees more security in the choice of the best properties available for sale, in the conclusion of real estate transactions and also in the efficient management of these assets.
Therefore, the purchase of properties located in Portugal offers very promising margins for financial return in view of Portugal’s economic situation. The country wants foreign money flowing into the interior and not the capital or coastal cities, and that’s what this new law promotes.