Investment
15 February 2021
It seems that the soap opera regarding what will or won't happen to golden visas has come to an end. On Friday (12/02/2021), Diário da República published an amendment to the law, dispelling some doubts but creating new ones. Shall we clarify them?
Regarding the real estate market, the most relevant summary is the following: from 1st January 2022 it will not be possible to apply for a Residence Permit for Investment (ARI) through the purchase of a house in (the majority of) the coastal area of mainland Portugal. This scheme will only be eligible for residential real estate investments "in the Autonomous Regions of the Azores and Madeira or in the inland regions". Please note that I used the terms “house” and “residential real estate investments”. And that, as we will confirm later, our legislators’ definition of “inland regions” is somewhat crude. Which leads us to two conclusions: that there are still opportunities for those who wish to invest in retail or offices in Lisbon and Oporto, as well as for those who don’t want to renounce a dive in the sea close to home.
The map below helps us understand the geographical areas (in white), which will no longer qualify for residential investments under the Golden Visa scheme. As well as those that will remain available for this purpose: low-density areas (blue and red).
Map of low-density municipalities and parishes.
Source: CIC.
First, an overview of the program: there are 8 different investment modalities, eligible for the so-called golden visa application. Which must be effective on the date of the request. Of these 8, 6 were subject to changes. Let's analyse what has changed and what hasn’t.
I) Capital transfer with a value equal to or above 1,5 million Euros.
What changed? The previous minimum amount was 1 million euros.
II) The creation of, at least, 10 job positions.
What changed? Absolutely nothing.
III) The purchase of real estate property with a value equal to or above 500 thousand Euros. When these properties are intended for residential use, they must be located in the Autonomous Regions of the Azores and Madeira or in low-density areas. This means that segments such as offices and stores will continue to be eligible for the golden visa application in the entire country, including Lisbon and Oporto. It should also be noted that, in low-density areas, the investment can be carried out with a value equal to or above € 400,000 (-20%).
What changed? The previous wording of the law enabled this investment to be carried out throughout the entire country, regardless of the use of the purchased property.
IV) The purchase of real estate property, with construction dating back more than 30 years or located in urban regeneration areas, for refurbishing, for a total value equal to or above 350 thousand Euros. When these properties are intended for residential use, they must be located in the Autonomous Regions of the Azores and Madeira or in low-density areas, where investment can be carried out with a value equal to or above € 280,000 (-20%). Segments such as offices and stores will continue to be eligible for the golden visa application in the entire country, including Lisbon and Oporto.
What changed? The previous wording of the law enabled this investment to be carried out throughout the entire country, regardless of the use of the purchased property. It should also be noted that, in low-density areas,
V) Capital transfer with a value equal to or above 500 thousand Euros for investing in research activities conducted by public or private scientific research institutions, involved in the national scientific or technologic system.
What changed? The previous minimum value was € 350,000.
VI) Capital transfer with a value equal to or above 250 thousand Euros for investing in artistic output or supporting the arts, for reconstruction or refurbishment of the national heritage, through the local and central authorities, public institutions, public corporate sector, public foundations, private foundations of public interest, networked local authorities, local corporate sector organizations, local associations and public cultural associations, pursuing activities of artistic output, and reconstruction or maintenance of the national heritage.
What changed? Absolutely nothing.
VII) Capital transfer of the amount of 500 thousand Euros, or higher, for the acquisition of units of investment funds or venture capital fund of funds dedicated to the capitalisation of companies, capital injected under the Portuguese legislation, whose maturity, at the moment of the investment, is, at least, of five years and, at least, 60% of the investments is realized in commercial companies with head office in national territory.
What changed? The previous minimum value was € 350,000.
VIII) Capital transfer of the amount of 500 thousand Euros, or higher, for constitution of a commercial society with head office in the national territory, combined with the creation of five permanent working jobs, or for the reinforcement of the share capital of a commercial society with head office in national territory, already existing, with the creation or keeping of working jobs, with a minimum of five permanent jobs, and for a minimum period of three years.
What changed? The previous minimum value was € 350,000.
Portuguese parliament .
By Euqirneto
Therefore, what changed in the residential market?
The enforcement of the rule stipulating that the purchase of residential properties in areas of mainland Portugal not defined as low-density regions, no longer qualifies for the application of the ARI.
Conclusion: those who wish to obtain one of the famous golden visas should consider ensuring it by the end of this year. Because as of January 2022, issuing this residence permit will require greater amounts of investment in most of the available modalities. And since a residential purchase will no longer qualify for a visa application if the property is not located in a low-density area.
Being that, contrary to what has been said (and even the wording of the law), the investment will not be entirely limited to interior areas. Except for the Municipality of Sines, the entire Alentejo coast is considered a low-density area, as is a small part of the Algarve’s coastal area (which covers the entire Vincentian coast).
Here is the complete list of low-density municipalities (cases in which the status applies to the entire municipality), and of low-density parishes located in non-low-density municipalities (when there are one or more parishes in a given municipality that benefit from this status, even though it does not apply to other municipality areas).
Source: CIC.
Source: CIC.
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