Gold visas continue, but only outside Lisbon, Porto and the coast areas.

Limits on the granting of residence permits, which aim to channel investment inland and islands, will have a transition period that lasts until 2022. In October 2012, with the objective of attracting foreign investment to the country, the gold visa regime is about to change. The Government approved yesterday (December 22, 2020)  the decree-law that alters the legal regime for residence permits for investment (ARI), which has developed for real estate sector in recent years. The new rules, which limit the granting of golden visas in the metropolitan areas of Lisbon and Porto, as well as on the coast (especially the Algarve), come into force as of July 1, 2021 and in a phased manner.

Still encouraging foreign investment  but it has to be channeled to the interior and islands is one of the main arguments of António Costa’s socialist executive to justify this change of rules, demanded in Parliament. The objective, in particular, is “to promote foreign investment in low-density regions, namely in urban requalification, in cultural heritage, in activities of high environmental or social value, in productive investment and in job creation”, as as you can read in the note from the Council of Ministers released yesterday.

Pandemic did delay the changing of the rules

With this approval, the Government gives shape to the legislative authorization given in the Assembly of the Republic, within the scope of the State Budget for 2020, and which had been on ‘stand-by’ at the peak of the pandemic, safeguarding the possibility of renewing residence permits already granted.

Now the socialist team has decided to move forward. But, due to the current crisis and the importance that gold visas have had for real estate, the Government opted to create a transitional period for the sector to try to adapt, instead of the entry into force at the beginning of the year, initially thought. “January 1 is too close for an amendment of this nature”, declared the Minister of State and the Presidency, Mariana Vieira da Silva, at the press conference that followed the Council of Ministers, stating that the context in which the legislation was approved , he adds, “it is different from what we live today”.

How will the transitional period apply

And as of July 2021, the intention to restrict gold visas to the geographical areas of the interior or low density, this new law will not start immediately . The plan is that the measure contemplated in the legislative authorization will be introduced gradually until the end of 2022.

This means that, within the scope of 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 thus continue to benefit from the current regime.

What will happen is that, during this period, the amounts required from investors for access to gold visas will be progressively higher , at the same time that the possibility of applying to metropolitan areas will be reduced, according to the minister, without explaining what these amounts will be.

Real estate has generated most of the associated investment 

Currently, the law determines that the acquisition of real estate with a value equal to or greater than 500,000 euros or else a purchase of a building over 30 years old, located in an area of ​​urban rehabilitation and that is rehabilitated, adding up to a total of 350,000 euros .

In November, 86 residence permits for investment were issued, 80 of which were for the purchase of real estate.  In terms of investment volume, last month there was an increase of 35% compared to the same period in 2019, to 50 million euros, according to accounts made by Lusa based on SEF statistics. compared to October, the growth was 75%.

In total, over these eight years, 9,340 gold visas were granted, associated with investments of 5,611 million euros. Of these amounts, 8,782 visas and 5,071 million have to do with real estate. After this sector, the category with the most receptivity is capital transfer, with 541 gold visas and 5,398 million euros.

The idea is that, with the new rules, foreign investment hitherto mostly linked to real estate, especially in large urban centers and main tourist areas, begins to be directed to inter-municipal communities (CIM) in the interior and autonomous regions , also increasing the number of investments in activities that enhance job creation.

So far, only 17 visas have been awarded for the creation of ten jobs , and three (two of which this past October) for the transfer of 350,000 euros linked to the support or strengthening of a company’s capital generating more jobs. 

There are still two categories that never managed to attract a single investor: the one that requires a minimum investment of 250 thousand euros in artistic production and the one that implies the minimum investment of 350 thousand euros in scientific research.

Source : The Idealista news from 23rd December 2020