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What incentives do foreign investors have in buying property outside of large urban centers in Portugal?

Wouldn't it be better for investors like me who usually prefer to invest in low risk areas to invest a million euros in equity instead rather than putting their money in some far flung real estate?


Answers
  • NEXT/Gali Macedo & Associados
    January 17, 2022

    The Portuguese golden visa offers several investment options, including: the purchase of real estate worth at least 500,000 euros, or real estate with construction dating back more than 30 years, or located in urban regeneration areas, worth at least 350,000 euros. These investment amounts reduce by 20%, when the investment is performed in a low density territory. A specific list with all the territories that qualify for this “discount” does not exist. Therefore, before investing, the chosen area must be analyzed in order to understand if it qualifies under one of those requirements. Investment in real estate for refurbishing/rehabilitation purposes demands that you not only buy the real estate, but also pay for the rehabilitation works that it must undergo (minimum investment of 350,000 euros – 280,000 euros with the 20% discount). Any of the above mentioned investments can be performed individually or in co-ownership with other investors, provided the minimum investment amounts are granted by each of them. Regarding this last option, there are a number of promoters and developers in Portugal whose projects are financed this way, and also take care of all the legal procedures before the Portuguese authorities towards your residence permit issuance. I advise this last option as being the best and most efficient way to have a Portuguese residence permit granted to you by means of the golden visa program, and from which you can take a considerable return during the five years the program requires you to maintain your investment.

  • Caiado Guerreiro
    January 12, 2022

    In low density areas, investors under the golden via program benefit by 20% in the minimum amount of investment. Although the ROI can also be more attractive, because prices per sqm are more reasonable, it is important to bet in a region with good potential to avoid liquidation risks. The pros and cons when comparing with fund investment are considerable, namely in terms of capital risk, liquidity and tax impact. Notwithstanding, the VC funds sector are adapting every day their offer and creating more conservative and attractive options design for investors with a low risk profile.

  • Lamares, Capela & Associados, Sociedade de Advogados
    January 12, 2022

    The incentive to invest in real estate in low population density areas is the investment amount that can be 280,000 euros for properties older than 30 years; the investment amount combines the purchase price and the renovation costs that the property may eventually need. It is significantly lower than the 1,500,000 euros required, since January 1, for the investment in equity. You have other options like the investment funds that require a 500,000 euros investment.