- Country’s Golden Visa program allows investors to acquire residency and citizenship
- Pre-pandemic, home prices experienced steady rise
Portugal’s Home Prices Consistent with Growing Market and Seller Confidence
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Prior to the COVID pandemic, house prices in Portugal were on a steady ascent for nearly a decade. Helping float that ascent was the country’s Golden Visa program. (More on that in a moment,) The pandemic and its subsequent lockdowns/border closings dampened demand but didn’t squash it.
Now, according to the National Institute of Statistics, prices have increased +6.3% y/y. Mirroring market and seller confidence level in 2021, asking prices for a home in Portugal are $241/square foot, up from $129/square foot five years ago, according to the property search site Idealista.
Golden Visa Program
The Golden Visa Program allows real estate investors the ability to acquire residency and citizenship to foreign investors. Its non-habitual resident program offers tax incentives to some nonresidents.
Among the more than 100 countries worldwide that participate in the Golden Visa Program,Portugal is considered to be the “easiest.”
This citizenship by investment program grants immediate citizenship to applicants and their families to work, live, travel and study anywhere in Europe as well as to qualify for a second passport.
As you can well imagine, particularly in our pandemic and post-pandemic world, demand has skyrocketed for the Golden Visa program.
Portugal’s Golden Visa Program
Launched in 2012, Portugal’s Golden Visa program has two subcategories: a real estate investment of $500,000 or the reduced option of $350,000 for a property that needs renovation.
Each option provides the ability to apply for permanent residency and citizenship after 5 years without the need to actually live in Portugal full-time. All foreigners need to do is visit Portugal for two weeks every two years to renew the Portuguese Golden Visa. Also, investors need to verify actual ties to the country and pass a basic language test.
Important Changes to Portugal’s Golden Visa Program
This program was obviously designed to increase foreign investment in participating countries.
In December 2020, Portugal’s Council of Ministers changed the parameters of where investors can purchase property to qualify for the country’s Golden Visa program.
As of July 2021, investments in the country’s most popular areas of Lisbon, Porto and Algarve will no longer qualify. (The government wants to increase foreign investment across the interior of Portugal.) However, there will be a transition period running to 2022 so investors can complete their applications.
Investors are encouraged to act now prior to these new changes taking effec
Buyer Activity and Foreign Investments Only Increasing
Oliver Banks, a senior negotiator with Knight Frank, said, “…many investment buyers (have) purchased apartments off-plan as rental investments or to ensure they secure the golden visa…” prior to the program’s expiration in the popular towns of Porto and Algrave and in Lisbon.
Idealista indicated that the asking price in March 2021 hit “$380/square foot, up from $184/square foot five years ago. The priciest neighborhood areas in Lisbon, Baixa and Chiado, sell for $727/square foot.
According to Patricia Casaburio, CEO of Global Citizen Solutions, said, “Prices are rising fast. Rent prices in this area are also very high, making it an ideal location for investment.”
Thanks to The New York Times.