Golden Visa can be a rescue for Portugal's real estate market

Sun 12 Apr 2020

The sector calls for the regime to be maintained and recalls that foreign investment was a lever for Portugal's recovery from the previous crisis.

With more than 80 percent of real estate companies halted due to the new coronavirus pandemic, the delay in the revision of the Residence Authorization Regime for Investment Activity (ARI), known as Golden Visa, could prove to be a saving bubble for the sector. The stalled economy and the need to ensure responses to the effects of covid-19 at all times have led the government to consider that there should be no change in the rules for the allocation of Golden Visa, provided for in the 2020 State Budget, by the end of the year.

Official source from the Ministry of Foreign Affairs confirmed to Dinheiro Vivo that the legislative change "is not a priority at this time" and will not take effect until the end of the year.

Real estate agents in Portugal complain about, therefore, demand the maintenance of the regime that facilitates foreign investment as a lever for recovery. "We will need foreign capital again after this crisis and we will need incentives so that this demand does not weaken," assures an agent. "It will be very important for the government to resume measures to encourage foreign investment, such as the Golden Visa program.

Even after the end of the year, this could be a major instrument, the president of the Association of Real Estate Professionals and Companies (APEMIP) also assumes. The government "should think twice" before messing with this scheme. "Nobody is going to get out of this crisis unscathed, and the country would be very grateful if these millions of euros could come in," Luís Lima points out. "Portugal will need the sector, like in 2012, and we need weapons to fish".

In March, 55 Golden Visa were granted, of which 51 were for real estate acquisition and four for capital transfer. The total investment was 27.99 million euros, with 25.6 million coming from the purchase of houses.

Review only in 2021
Already in February, the Deputy Secretary of State of the Prime Minister, Tiago Antunes, stated that the new Golden Visa rules would only come into force at the beginning of 2021, in order not to disturb ongoing business. But if and when this regime is revised, the sector asks for caution. The decentralization of foreign investment to regions with lower population density, which the government wants, could lead to "a negative impact on tourism, due to the potential that these investors generate in the local and national economy.

It should be recalled that a proposal from the PS for legislative authorization on the ARI regime was approved under the 2020 State Budget. The aim is to restrict real estate investments to the territories of the interior of the country and the autonomous regions of the Azores and Madeira in order to obtain a Golden Visa, and also to increase the minimum value of investments and the number of jobs to be created.

The proposal also aims at easing the pressure of the real estate market in Lisbon and Porto, ending with the possibility of obtaining a Golden Visa through the acquisition of real estate in these cities and in the Litoral Intermunicipal Communities. The legislative authorization has the duration of the year to which the State Budget 2020 corresponds.

Read the original article here.

Photo by Suad Kamardeen on Unsplash

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