Contradictions around Portugal's "Golden Visa" program

Golden Visa in Portugal

There have been contradictions surrounding Portugal's "golden visa" program in recent days. Many officials at different levels are speaking out about the future and past of this popular program, but difficulties in its translation leave many questions unanswered. During a press conference held on March30,2023, Prime Minister António Costa again announced the imminent termination of the "golden visa" program. He also mentioned possible changes in conditions for current holders. Previously, the head of the cabinet of ministers had spoken about the possible termination of the scheme at the largest IT conference Web Summit in November2022. Despite this, the vote in parliament against the cancellation of the program was successful. However, on February16, the prime minister once again announced the end of the "golden visa" era, but did not give a specific date for its cancellation. The bill has not yet been passed, although debates continue around it.

Opponents of the program

Opponents of the "golden visa" program in Portugal express their dissatisfaction with two main arguments. First, they believe that the program does not contribute to the development of the Portuguese economy, but only promotes investment in real estate. Indeed, in the 11 years of the program's existence, 89% of investments have been made in various real estate properties, and only 22 of the 11,758 permits have resulted in the creation of new jobs.

Second, opponents of the program argue that it makes housing more expensive, making it unaffordable for locals. Real estate prices in Portugal in 2022, indeed, showed growth. However, the magnitude of this growth is estimated differently. According to the research company Confidencial Imobiliario, prices rose by 18.7%.

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At the same time, the National Statistical Institute (INE) reports that the average annual price growth for new buildings was only 8.7% and for secondary housing 13.9%.

However, the connection between the "golden visa" program and the rise in housing prices is not obvious. Since 2022, the purchase of real estate in the most popular areas of the country no longer entitles to a "golden visa". Consequently, real estate prices in these areas do not increase due to the activity of foreign investors who are interested in obtaining a residence permit.

Opponents of the golden visa program propose various options for reform, including tougher rules and restrictions for investors. One of the ideas is to limit the extension of "golden visas" to only those properties that are used for own residence or rented out in the

long-term leases. Another idea is to turn "golden visas" into regular residence permits, giving up some of the advantages of investors, such as a shortened period of stay in Portugal. Instead, it is proposed to require holders of "golden residence permits" to stay in the country for at least six months a year. Thus, various options for reform are under consideration, and the final decision on the "golden visa" program in Portugal has not yet been made.

Supporters of the program

Portugal's "golden visa" program, which gives investors the opportunity to obtain European citizenship when investing in the country's economy, has found itself at the center of a scandal. Despite its financial success, there are proposals to close it. However, supporters of the program argue that any changes to the rules would be unconstitutional and damage Portugal's image with investors.

The petition website has published an appeal to the country's president and prime minister, in which investors and lawyers demand compensation for the loss of rights and unconstitutional changes. However, the head of the Madeira government has stated his intention to keep the "golden visas".

Despite this, the current version of the bill has not been published and it is expected to be debated and amended in Parliament. Many lawyers have raised concerns that many of the proposed measures would violate the Portuguese Constitution. A lengthy process of debate and approval of the final text of the law in Parliament is expected in the coming months.

Portuguese experts see three possible scenarios: the president may not approve the law and send it to parliament for revision; he may adopt the law but require an evaluation by the Constitutional Court; or he may adopt the law without changes. In the latter case, the law will be published in the official journal, but the transitional period is currently undefined.