Important Changes to the Golden Visa in Portugal

Review Portugals Golden Visa

Potential Golden Visa applicants – the Portuguese Government is introducing some major changes to its Golden Visa programme (known in Portugal as ARI).

The new rules will limit the number of Golden Visas granted in the cities of Lisbon and Porto, as well as in other coastal areas, including the Algarve. This is because Portugal now wishes to encourage more foreign investment in its interior regions and the islands of Madeira and Açores.

These changes will start to come into effect on 1 July 2021, when they will be introduced in phases.

The decision to promote more foreign investment in low-density regions (particularly in the areas of urban requalification, cultural heritage, productive investment, activities of high environmental or social value and job creation) was approved within the scope of the Portuguese State Budget for 2020.  This has been on stand-by since the start of the pandemic, but the Portuguese Government has now decided to move forward, whilst still accepting applications to renew residence permits already granted.

Due to the current crisis and the importance of Golden Visa investments to the real estate market, the Government will introduce a transitional period to allow the sector to adapt, rather than launching the new criteria at the beginning of 2021 as originally intended.

Although the restriction of the Golden Visa to the interior of the country (or to low density real estate investments) begins in July 2021, it will not start immediately, but will be introduced gradually up until the end of 2022.

During the transitional period, those interested in obtaining residence permits in exchange for making investments in real estate in the metropolitan areas of Lisbon, Porto and the coast can continue to benefit from the current regime. However, the monetary requirements for access to Golden Visas will become progressively higher, and at the same time the possibility of applying to metropolitan and coastal areas will gradually be reduced. It has not yet been disclosed what the new investment amounts will be.

With this in mind, we strongly advise all potential Golden Visa applicants who wish to invest in Lisbon, Porto or the coast to make their Applications as quickly as possible, before the changes take place.

Chinese investors are seeking new investment opportunities in Portugal under the Golden Visa programme

Chinese investors are seeking new investment opportunities in Portugal under the Golden Visa programme
The exponential awareness of Portugal’s Golden Visa programme has increased the number of investors, specifically Chinese investors, who are flocking to secure the best international investments in addition to safeguarding their family’s future.
Statistics from SEFSTAT reveal that an overall 480,300 worldwide nationals applied to Portugal’s Golden Visa programme between June 2017 – June 2018 with 25,377 of these main applicants coming from both Hong Kong and China. This recent survey confirms that when combined, nationals from Hong Kong and China are one of the leading national groups to apply under Portugal’s Golden Visa programme, running close behind Brasil and other South American countries.
With flexible and accessible investment opportunities, Portugal has become one of the most popular Golden Visa programme in the market. With a minimum investment of €280,000 in real estate, applicants and their family members can obtain a residency permit to Portugal that enables them to live, work and attend educational institutions. Benefits also include no extra tax on income both in Portugal and in the applicant’s home country, visa-free travel to the Schengen countries, no residential requirement and if the investment is in property, applicants have the option to rent it out. The highlight of applying under Portugal’s Golden Visa programme is that applicants and their dependants can obtain a permanent visa within 5 years and citizenship status within a year thereafter.
For more finite details and to explore the opportunities of investing in Portugal, please feel free to contact one of our representatives on 0207 799 1606 or alternatively, email info@coatesglobal.com

Portugal’s changes to rental income tax

With the new state budget proposed by the Portuguese Government for the year 2019[1], the taxes for all rents received through rental agreements for residential purposes have undergone some changes. Such changes could see the previous rate of the 28% of income tax being reduced to the following:

– Rental agreements with a minimum period of at least 2 years and up to 5 years may see a reduction to 26%. Please note that per every renewal of a rental agreement, the tax reduces by 2%. The income rate, however, can only be limited to 14% and can go no lower;

– Rental agreements with a minimum duration of 5 years and a maximum of 10 years may see a reduction to 23%. With such rental agreements, for every renewal the tax reduces by 5%, but will go no lower than a 14% rate;

– Rental agreements with a minimum of 10 years and a maximum of 20 years may see a reduction to 14%. In this case, it is not possible to reduce the tax any further;

– Rental agreements with 20 years+ may see a reduction below 14% to 10%. In such cases, there is no possibility to reduce the tax any further.

For all the above rental agreements, it is key that the landlord must effectively communicate when the agreement(s) have been signed and pay the respective stamp duty (10% of the monthly rent to be paid by the tenant) to the local tax office. From the moment that the registration of the rental agreement is concluded as mentioned, the tax rate of each invoice is to be issued by the landlord to the tenant with the automated tax reduction.

The primary reason that the Portuguese Government have taken such measures is to promote the residential renting market for Portuguese nationals and reduce the amount of properties for the short-term rental market.