Portugal's Golden Visa changes explained
David Moura-George, Director of Portugal at Athena Advisers, and Joana Martins Farinha, a partner from Legal Square, explain the upcoming changes to the Portuguese Golden Visa programme.
The Portuguese Golden Visa programme was launched in 2012 to help the country attract international investment during the economic crisis. To date, the Golden Visa programme has raised more than €5.6bn in investment and more than 26,000 investors and qualifying family members have applied (SEF). Though the changes were only confirmed at the start of 2021, it was announced in 2020 that the Golden Visa programme will be changing, this created a surge in demand for Golden Visa properties over the past year. Despite the effects of COVID-19, €647m was invested in the Golden Visa programme in 2020.
Now confirmed by the Portuguese government, the Golden Visa programme will be changing from 1st January 2022.
The minimum thresholds for certain investments will increase next year. At the moment, those who invest €350,000 or more in a qualifying fund are eligible for a Portuguese Golden Visa. However, next year the minimum sum of investment will rise to €500,000. Several other investment options will be affected too.
From next year, those who buy a property in Lisbon or Porto, as well as other high-density areas, will no longer be eligible for the Portuguese Golden Visa programme. However, residential property in the Azores, Madeira and the interior of the country will still be eligible next year. It is also important to stress here that this change will not affect commercial property so those buying a commercial property in Lisbon next year will still have the option to apply for a Golden Visa.
Summary of the Golden Visa changes
2021 – minimum investment required:
- Capital investment: €1m
- Investment in qualifying funds: €350,000
- Investment in property: €500,000 or €350,000
- Job creation: €350,000 increase of share capital of a company. 5 new jobs must be created and maintained for at least 3 years.
- Investment in science and research activities: €350,000
2022 – minimum investment required:
- Capital investment: €1.5m
- Investment in qualifying funds: €500,000
- Investment in property: €500,000 or €350,000. However, only residential properties located in the interior area of Portugal, the Azores and Madeira will qualify.
- Job creation: €500,000 increase of share capital of a company. 5 new jobs must be created and maintained for at least 3 years.
- Investment in science and research activities: €500,000
When should I begin my Portugal Golden Visa application to meet the 2022 deadline?
As the Golden Visa programme is changing at the end of the year, those who want to access it by investing in Lisbon or Porto real estate should aim to purchase their property and begin their application by the end of September at the latest. This is because it takes the immigration office around 90 days to pre-approve applicants and it is only after this pre-approval that investors are formally considered to be part of the programme. By investing early, clients will have a safety buffer in case any problems occur.
There is a limited supply of Golden Visa properties in Lisbon. Whilst the upcoming changes have increased the demand for Golden Visa properties, the pandemic has had an impact too. Joana comments that she has many clients from countries that haven’t handled the pandemic well who are looking for a plan B or another place to stay should future lockdowns occur.
Five reasons to invest in a Golden Visa
- Most people apply for a Golden Visa by investing in Portuguese real estate and, at the moment, it is possible to apply for the Golden Visa programme by acquiring a property as low as €350,000 or €500,000. Properties that are older than 30 years and located in regeneration areas can often qualify for the lower rate of €350,000 if the property is being renovated. However, €350,000 Golden Visa properties in Lisbon are increasingly hard to find.
- Fast track to residency for investors and their immediate family: once the investor has purchased a qualifying property, they can apply for residency immediately and include qualifying family members in the same application.
- Once you have your Golden Visa, you can enjoy hindered travel throughout the Schengen zone.
- One of the best things about the Golden Visa programme in Portugal is that investors will only need to spend, on average, seven days a year in Portugal. It is up to you whether you want to spend a week in Portugal or break it down into several shorter stays.
- At the end of the fifth year, you will have the opportunity to apply for full Portuguese (EU) citizenship, permanent residency or you can renew the Golden Visa for a third and final time. Joana comments that after the fifth year most clients chose to apply for citizenship.
Applying for a Golden Visa in Portugal – step by step
Once the investment has been made, the online application for the Golden Visa can begin and clients will need to pay the initial analysis fee. This whole process typically takes around three months and you will receive a document to say that you have been pre-approved for the Golden Visa programme after the third month.
Once you have this pre-approval, it is then possible to arrange the next steps, such as the collection of biometric data and the submission of the physical documents. Joana explains though it may be more convenient to book an appointment at a Lisbon Immigration Office, it isn’t always the fastest route as approvals here can take 14 – 18 months. Instead, Joana recommends that clients go to an immigration office in a smaller town as the approval process usually takes around six months or nine months at the most.
Once the application is approved by the immigration office, your residency cards can be collected by your lawyer and forwarded to your home address.
One of the great things about the Golden Visa programme is that investors can add certain family members to their Golden Visa application. Qualifying family members include:
- Spouse or partner. Portugal allows gay marriage which means that same-sex partners and spouses can be included too.
- Dependent children of the investor or spouse/partner.
- Older children who are under 21 and still economically dependent on their parents (unmarried and enrolled in full-time education).
- Dependent parents of the investor or their spouse.
Why invest in Lisbon real estate?
There are plenty of reasons to invest in Lisbon, David Moura-George highlights that these are the five main motivations for international buyers:
- EU residency: as explained above the Golden Visa programme is a fantastic incentive for non-EU residents as it grants them the opportunity to live, travel and learn throughout the EU and paves the way to citizenship.
- Tax incentives like the non-habitual resident programme for those who choose to move here permanently.
- Rental income generation: plenty of opportunities for buy-to-let investors.
- Entrepreneurship: not only is Lisbon emerging as a major tech hub but the government has numerous incentives in place to promote entrepreneurship.
- Quality of life: 300+ days of sunshine a year and a lower cost of living are just some of the reasons why so many people chose to call Lisbon home. Lisbon was also crowned the Green Capital 2020 by the European Commission thanks to its environmental and sustainability initiatives. This included cleaning the Tagus river, a new electric bicycle system, 90km of new cycle paths and creating 300 hectares of green space within the city.
What's next for Lisbon?
Lisbon is now the official home of Web Summit, the largest technology conference in the world. Not only does this further cement Lisbon’s reputation as a major tech hub but it is expected that this will bring in an additional €2bn of revenue to the economy over the next decade.
Lisbon is the future home of the largest start-up hub in the world, Hub Criativo do Beato, which is located in Marvila and will span 100,000 sqm upon completion.
Google and other major international companies such and BNP Paribas are opening offices in Lisbon and creating more jobs.
It is not only businesses that are driving Lisbon forward, but the government is investing €23bn into public infrastructure. This includes the creation of a high-speed rail link between Lisbon and Porto which is set to be delivered by 2030.
In 2023, a brand new airport will be opening in Lisbon which will welcome 43 million visitors a year, doubling the city’s flight capacity.
A selection of Golden Visa properties.
Golden Visa FAQ
What happens if I apply for a Golden Visa but I am unable to travel to Portugal to submit the biometric data due to travel restrictions?
In the past, applicants had to submit their biometric data within six months of their pre-approval. However, this is no longer the case. At least until the end of 2021, there is no deadline for submitting biometric data which is great news given the various travel restrictions in place.
How much does a Golden Visa in Portugal cost?
This is one of the most common questions which we receive and the costs, all of which are payable to the Portuguese government, have been broken down below:
Immigration application fee: €533 per person
You will need to pay this fee right at the beginning of the process in order to submit your online application and you will also need to pay this fee again when you apply for your first and second renewals of the Golden Visa programme.
Immigration office approval fee: €5,325 per person
This must be paid for the first approval, but, fortunately, the rate is reduced for future residency renewals.
Residency renewal fee: €2,663 per person
Following the current timeline for the programme, you can expect to renew your residency every two years.
Disclaimer: It is important to remember that the government can change these fees on a yearly basis. Normally, it is not a huge change just a slight increase of a few cents or a couple of euros.
Are the fees for the Golden Visa charged per family unit or per person?
The fees are charged per person.
Is the Portuguese Golden Visa the same as a D7 Visa?
No, it is not. The Golden Visa is an investment programme whilst the D7 is a residency programme. For the D7 Visa, you are required to reside in Portugal whilst for the Golden Visa you will only need to stay in Portugal for, on average, seven days a year.
How much time must I spend in Portugal in order to qualify for a D7 Visa?
You must spend at least four months during the first year and in the subsequent two years, you must spend a total of 16 months in Portugal. The Golden Visa is much more flexible as you only need to spend, on average, seven days a year in Portugal.
From 2022, properties for sale in Lisbon will no longer be eligible for the Portuguese Golden Visa programme. How is Lisbon defined – is it just the city centre?
The restrictions are on the larger Lisbon area, not just the city.
Is it possible to submit biometric data via the Portuguese Embassy in my home country?
No, you will need to travel to Portugal and visit an immigration office to submit your biometric data and physical documents.
Is it possible to pay for Athena Advisers services without buying a property through Athena Advisers?
Absolutely. Please do get in touch to learn more about our client services.
What happens if I apply for a Golden Visa for my child and they become financially independent during the five year period?
If the child is no longer dependent, leaves education or gets married, the immigration office will cancel their Golden Visa.
If my brother and I purchase a Golden Visa property for €350,000 can we both apply for a Portuguese Golden Visa or would we need to invest €350,000 each?
You will need to invest €350,000 each as siblings are not classed as qualifying family members.
If I apply for citizenship after five years, am I allowed to sell my Portuguese property or must I maintain my investment?
Yes, once you become a citizen you are free to sell your property. To ensure that your application goes ahead smoothly, Joana advises that you maintain the investment whilst you wait for the citizenship application to be approved and only sell your property once you have received your passport. At the moment, the approval process takes between 18 months and two years.
Can I apply for a Golden Visa by purchasing a commercial property in Lisbon?
Yes, commercial properties in Lisbon are eligible for the Golden Visa programme and will continue to be eligible next year. Only residential properties will be affected by the upcoming changes.
How is commercial property performing in Portugal?
Last year was the third-best year in terms of commercial property sales with €2.8bn+ invested. Whilst the high street has been affected by Covid-19, it is important to remember that the commercial sector encompasses a whole range of properties including supermarkets, offices and logistics (warehouses etc.) which has boomed in Portugal over the past year. Take a look at our commercial property market update to learn more about commercial property trends in Lisbon.
I’m interested in commercial property in Lisbon – could you tell me a bit more about the logistics market?
Over the past year, Covid-19 has meant that more and more Portuguese people are buying products online. In fact, online sales have tripled over the past year. This has led to increased demand for logistics properties such as warehouses. See our Portugal commercial property market update for more information.
Is the €350,000 or €500,000 minimum investment based on the value of the property or the actual sale price?
It is based on the purchase price.
What taxes apply during residency?
It’s hard to give an exact answer for this one as it depends on whether you are a tax resident in Portugal, the type of investment you make and whether you have any income in Portugal.
How much is inheritance tax in Portugal?
No inheritance tax needs to be paid on inheritance from parents to children.
What are the obligations of Portuguese citizenship eg. voting, national service and tax?
There are no obligations.
In order to apply for a Portugal Golden Visa, does the property need to be owned by one family member or may a couple purchase it together?
Under Portuguese law, the investment must be done in the name of the investor. In Portugal, there are three common marriage regimes. One of them is the ‘jointly acquired assets’ regime and this is the one Joana normally recommends clients to state in the documents as marital agreements worldwide are not all the same. If it is stated in the power of attorney that you and your partner are married under the ‘jointly acquired assets’ regime, regardless of whose name is stated on the documents, the property will be owners in equal parts of 50% by each spouse.
Are the Portugal Golden Visa and NHR (non-habitual resident) programmes related?
The NHR programme is not related to the Portuguese Golden Visa programme and will not have any impact on your citizenship application. You can apply for both the NHR programme and the Golden Visa at the same time but do note that you must spend at least 183 days a year in Portugal to qualify for the NHR programme.
Regarding citizenship, should one begin the application process only after five years of Portuguese residency or can I start the process earlier?
You can only request citizenship once you can prove five years of valid and legal residency in Portugal. As you need a document from the immigration office to prove this, you cannot start the citizenship application any earlier.
I am a US citizen – what are the advantages of becoming a Portuguese citizen?
The main advantage for US citizens is that they can apply for a Portuguese (EU) passport.