Breaking News: Portugal To Close Its Golden Visa Program
Following recent speculation, it has been announced that Portugal is planning to close its entire Golden Visa Program.
Prime Minister António Costa made the announcement in a televised press conference yesterday (16 February 2023). The proposal to end the Golden Visa was announced as part of series of measures to support housing in Portugal, where there are currently issues with a shortfall of available properties and prohibitively high prices, together with a preference for shorter lets, all of which disadvantage local people in what is one of Europe’s poorest economies. Mr Costa announced “Two particularly important measures to combat property speculation – the first, the elimination of Golden Visas, or rather the elimination of the granting of new Golden Visas.”
The Golden Visa program was started in Portugal in 2012 as part of an attempt to increase the country’s ailing finances. Since then the program has brought in over €6.8 billion. However, it has been criticised by Portuguese politicians for pushing up property prices unfairly and EU officials have pointed out the risks of the program facilitating money laundering and tax evasion.
The package of measures including the proposal to end the Golden Visa program will be discussed in the Portuguese Parliament on March 16 after a series of hearings, with the final decision of the government to come after discussion of the proposals in their entirety and submission of them to the assembly of the Republic, where they will need to be approved by the President.
Full details of the scrapping of the program are yet to be revealed, including whether there will be a transition period, but the decision appears to have been taken following a 2022 review of measures taken to modify the Golden Visa. The government had discussed whether to restrict the property investment element of Golden Visa applications to the interior of the country only. The Minister of Finances commented that the proposal to end Golden Visas had come about because “ … the assessment that is done even of the recent changes that have been made regarding the limitation to real estate were not sufficient regarding the continuation of the mechanism.”
Around 98% of Citizenship by Investment applications in Portugal have a property investment element to them, leaving non-property investments in a considerable minority. The Prime Minister revealed that of the approximately 11,000 Golden Visas granted so far under the program, 9000 of them were through property. This, he said, left “a very low rate, not to say almost zero, in job creation and a very low contribution to other activities.”
It is likely that existing applications will continue to be processed normally, but no new applications will be accepted.
The Portuguese government is also considering the legality and practicality of changing the conditions attached to previously issued Golden Visas. They are proposing that those visa-holders who purchased property as part of their Golden Visa application would only be allowed to renew their residency visas if they could guarantee that the house or property was their (or their children’s) primary residence, or if they were renting the property out to a long-term tenant. They would no longer be able to let the property out short-term or to holidaymakers.
The small minority of people who had obtained their Golden Visas through the non-property route, such as through investment in the arts or culture (specifically mentioned in the press conference) or through investment in businesses, would have their Golden Visas converted to other types of visa. It is being questioned whether such changes after the visa has already been granted, are constitutional and legal.
It is advised that investors whose applications are at an advanced stage, take all measures to complete their application in a timely manner, while those at an early stage in the process complete their preparatory steps in order to be in a strong position when more information on the new conditions and timescale is announced.
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