By Uglobal Staff
The Portuguese government today announced ending its golden visa program in an attempt to tackle the housing crisis in the country. During a press conference about new housing measures, Portuguese Prime Minister Antonio Costa said he wanted to share “several measures to end the speculation in the real estate market.”
“The first one is to end the Golden Visa,” he said. “But to clarify, to eliminate the awarding of new ones.”
The move comes after rents in Portugal have increased “far beyond inflation,” he said. “I think there are a lot of real estate that can be lived in but they are not on the market. We need to increase the supply of real estate that can be used for housing.”
To renew existing Golden Visas, either the investor or close family members have to live in the property or it has to be rented out long term or be used for cultural purposes, Costa said.
“Exclusively for real estate, it has to be this way,” he said.
The housing measures, which include a host of other non-Golden Visa measures, will be available for public comment until March 16 when they are expected to take effect.
Portuguese RCBI professionals react to the announcement
“The Portuguese government has announced the end of the Gold Visa program as a whole,” says Raquel de Matos Esteves, founding partner at RME Legal, continuing: “This measure, apparently linked to the impact of Gold Visas on rising housing prices, is completely unfounded.”
Esteves sees the measure as counter-productive because “even if we were to admit the impact of the Gold Visas on the value of real estate in Portugal (when clearly the numbers prove otherwise), we would never understand the end of investment in funds that invest in Portuguese companies, the end of investment in the creation of companies and job creation, among other alternative options that could be created,” she explains.
The draft of new decisions will have to be approved by the legislator before coming into effect, which is likely to happen due to the absolute majority the Socialist ruling party, according to Sara Sousa Rebolo, partner at Lisbon-based Prime Legal.
It remains unclear how long it would take for that to happen. “We still don't know what the implementation period of this measure will be,” explains Esteves, however, the decision is up for public comment until March 16.
“It is expected that the next step will be a public discussion in which relevant stakeholders will be invited to give their feedback,” says Diogo Capela, co-managing partner at Lamares, Capela & Associados. “The discussion will take place during next month. Following the discussion, a new Meeting of the Council of Ministries will take place on March 16th, where it is expected that a final proposal will be drafted to be presented to the Parliament.”
“The minimum that is expected is that there will be a transition period in place for those who have started investments in the country to have time to submit their application for the Gold Visa program,” Esteves adds.
Current Golden Visa investors aren’t safe from the new measures
As for Golden Visa holders by way of real estate investment, the Prime Minister announced that they’d only be able to renew their golden visas in the future if they are residing in their apartments or if they place them in the long-term rental market, as opposed to Airbnb or other tourism rental options.
Esteves sees this condition as unprecedented and concerning.
“The most serious aspect is that it sets the precedent of changing the conditions for renewals of gold visas already granted: renewals in the case of real estate investment will now be dependent on the investor or descendants using the property as their permanent home or on the property being on the market for rental housing in a "long term manner.”
She adds: “The measure, with a very harmful effect for the country, is to be regretted, and it is hoped that the contours of these measures can still be corrected, allowing Portugal to maintain the confidence of investors.”
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