Following the announcement of a new law that will limit non-resident investors in Portugal’s booming property market, some of Europe’s most popular destinations for foreign investment are now seeing a drop in demand. The Golden Visa programme, which allows non-EU citizens to gain residency status by purchasing property worth more than €280,000 (£250,000) has been hugely successful for many European countries but there are fears it could lead to a rise in homelessness as those who had planned on selling up now find themselves stuck with an asset they can no longer sell on at the price they were hoping for.
The Golden Visa Programme will be Halted
The Golden Visa programme will be halted and replaced by a new law to prevent housing crisis in Portugal, according to the government.
The so-called ‘golden visa’ programme was launched in 2012 as a way for people from outside the European Union (EU) to get residency permits if they invest at least EUR 280,000 (£250,000) into Portuguese companies or assets. It has been criticised for attracting rich investors who buy property but don’t create jobs or contribute much economically.
The country has seen a major influx of foreign property owners coming in as a result of the scheme
Portugal has seen a major influx of foreign property owners coming in as a result of the scheme. It is one of the most popular places for foreigners to buy property and there is a risk that the country will be flooded with foreign property owners if this continues.
Portugal’s economy is growing faster than almost any other Eurozone country and it needs to stop its domestic market being flooded
The Golden Visa scheme was introduced in 2012 by former prime minister Jose Socrates, who said it would encourage wealthy foreigners to invest in Portugal’s real estate market and help boost the country’s economy. However, since then there has been a major influx of foreign property owners coming in as a result of the scheme – with many buying properties without ever intending on living there themselves.
Those who already have golden visas will still be able to live in Portugal but they may see their benefits cut.
Those with a Golden Visa will no longer qualify for tax breaks and will be subject to the same tax laws as other Portuguese citizens.
It is expected that many of those who have bought into Portugal will sell up now that the law change has been announced, which could put pressure on property prices across Europe
It is predicted that this will be good news for investors looking to buy property in Portugal as it should help to bring down prices and make them more affordable.
There are risks associated with buying investment properties from outside your own country
There are risks associated with buying investment properties from outside your own country. You may not be able to sell it when you want to, or at all. If this happens, then you could end up forced to sell at a loss.
Furthermore, if the property is rented out (as most investment properties are), there may be restrictions on how long tenants can stay in the property and what kinds of rental agreements they sign up for. This means that even if someone wants to rent from you as soon as possible after purchasing their Golden Visa, they might not be able to do so because of these restrictions set by Portugal’s government.
In addition, some countries offer tax benefits for foreign investors who purchase real estate within their borders–but Portugal does not currently offer any such incentives; therefore investors who buy through this program may find themselves paying higher taxes than those who invest locally instead
Conclusion
If you are looking to invest in property overseas, it is important to do your research and understand the risks involved. The golden visa programme was a great opportunity for investors but it has now come to an end in Portugal. This could mean that prices will fall as there are fewer buyers coming into the market from outside Europe who want to purchase their first home or rental property here.