What is expected for the "golden visa" program in Portugal?

During a press conference held on March 30, 2023, Portuguese Prime Minister António Costa addressed the possible termination of the "golden visa" program. He also mentioned potential changes for current holders of the visa. It is worth noting that this is not the first time the head of government has made such a statement.

He made a similar statement back in November 2022 during the Web Summit, the largest event in the IT sector, which was not directly related to the program being discussed. Shortly after that, in two weeks, parliamentary elections were held where the budget was being considered. In this context, the three main political forces in the country — the Socialists (the party to which Costa belongs), the Social Democrats (the second largest party in the country), and "Chega" (the latter two are in opposition) — expressed their opposition to the cancellation of the "golden visa." At the same time, the Democrats and representatives of leftist parties supported its cancellation. Thus, during that period, discussions on this issue quieted down for a while.

Support and opposition

However, on February 16 of this year, during a press conference in Lisbon following a government meeting where affordable housing issues were discussed, Costa once again expressed the opinion that the time for "golden visas" is coming to an end. Nevertheless, as before, he did not set specific deadlines for their cancellation, only stating that a final decision on this matter would be made within a month of the bill's presentation.

• No news has been received on this matter.
• The presentation of the bill has been postponed until March 30.
• At the moment, no laws have been passed yet;
• Information about them remains out of public access.

Criticism of the "golden visa" program

Skeptics of the "golden visa" program are unhappy with its existence and justify their point of view by stating that Costa emphasizes the program's shortcomings, claiming that it does not contribute to the economic development of Portugal, but rather attracts investments into the mortgage market.

According to current regulations, investors had the opportunity to invest in local companies, but in eleven years only11%of the total investment went into setting up the business, and89%was diverted into real estate.

Key points

• Of the 11,758 permits issued, only22have led to the provision of new jobs;
• The program significantly increases the cost of housing, making it unaffordable for local residents.

In fact, in2022year, the average value of real estate in Portugal showed a significant increase, but different analytical companies give different estimates. For example, according to reports by Confidencial Imobiliario, housing prices increased by18,7%. Such changes raise legitimate questions for the nation's citizens and health care organizations, which is becoming increasingly relevant in light of the national discussion about housing affordability.

Suggestions for possible solutions to current real estate problems also remain on the agenda, and given current trends, discussion of this program will continue.

According to information provided by Portugal's National Institute of Statistics (INE), the average price increase for new apartments in the country in 2022 was only 8.7%, while the cost of secondary housing increased by 13.9%. Nevertheless, uncertainty remains as to how the golden visa program affects property prices. Since the beginning of 2022, the possibility of obtaining a “golden visa” when buying real estate in topical areas such as Lisbon and Porto has been canceled. This suggests that price growth in these regions is not driven by the interest of foreign investors seeking residence permits.

Program outlook

As for the prospects of this program, its opponents propose various options, ranging from complete termination to tightening of existing conditions. The problem is exacerbated by the lack of clear information, as there are currently many proposals, but they have not yet passed into law.

• One idea is to require golden visa holders to use their property for either personal residence or long-term rental if they wish to extend their visa.
• Another approach might be to convert these visas into standard residence permits, which would affect some existing benefits.
• For example, it is proposed to increase the minimum period of actual stay of a visa holder in the country to six months, as opposed to the current seven days per year.

It is important to note that no decisions have been made to date and all requests submitted remain pending.

Conclusion

In conclusion, noting the dynamics of discussions around the “golden visa” program in Portugal, I cannot but emphasize the importance of this issue both for the country and for foreign investors. Over the past months, Prime Minister António Costa has repeatedly returned to the topic of possible closure of the program, but there are still no specifics on terms and conditions. Each of his conclusions about the forthcoming changes only fuels interest and causes concern among visa holders, as well as those who are just about to apply.

Economic context

Debates about the economic feasibility of the program and its impact on the housing market continue. It is important to note that despite growing criticism, support for the program among certain segments of society also remains significant.Financial incomefrom the program play a significant role in the country's economy. Moreover, the legal and constitutional aspects of possible changes raise many questions, and discussing them only increases uncertainty, which in turn may discourage investors.

The need for dialog

In view of the above, I believe that this situation requires attention not only from the state authorities, but also from civil society.The interests of all parties must be heardWe hope that the coming months will bring clarity and constructive dialog between the government and society, which will allow the current crisis to be resolved and the interests of all market participants to be taken into account. We can only hope that the coming months will bring clarity and constructive dialog between the government and society, which will allow to overcome the current crisis and take into account the interests of all market participants.