After a boom in the number of people moving to Portugal under the ‘golden visa’ program, some expats are choosing to leave the country, especially Americans. Potential reasons could be the ballooning housing market as well as some bureaucratic challenges linked to healthcare and other daily aspects of life. According to Bloomberg news, during the first half of this year there was an 18% drop in demand for residence by foreigners under the ‘golden visa’ program compared to the same period last year. The decrease among Americans was of 37%, according to Get Golden Visa, an international advisory firm.
Data from the Foreigners and Borders Service (SEF) show that between October 2012 and January 2023, Portugal granted 11,628 gold visas, most of them to citizens from China (5,258), Brazil (1,178), the United States (558), Turkey (547) and South Africa (508). A total of 18,962 residence visas were granted for family reunification. They are given to family members of a residence permit holder so that they can live legally in Portugal.
The SEF reports that in that period, around six billion euros were invested in the purchase of real estate, which allowed 10,668 foreigners to acquire an Investment Residence Permit by buying a house. Between October 2012 and January this year, 938 foreigners got a golden visa in Portugal through money transfers and 22 with the creation of jobs.
The Prime Minister, António Costa, said that the golden visas already granted can be renewed in the case of own and permanent housing of the owner and his or her descendant, or if the property is placed on the rental market long term.
In 2022, the government also launched a digital nomad visa program to revive tourism and attract individuals who were able to work from abroad. The number of foreign residents increased by 40% in the past decade, according to Bloomberg, which brought the total to nearly 560,000. Data from the Portugal Statistics Institute revealed that between 2008 and 2012, the number of Americans reached almost 10,000. The trend seems to be going in the opposite direction due to inflation, housing problems, and other bureaucratic difficulties.
End of the golden visa program
In February of this year, the government put forward a proposal called ‘More Housing‘, which included the abolition of the golden visa program. The visa had received a lot of criticism from the European Commission on the basis that it could be a vessel to facilitate money laundering.
On February 16th, the Portuguese government presented the ‘More Housing’ package of measures. “It is a measure to combat real estate speculation,” said Prime Minister António Costa. This fight against speculation is one of the five axes on which is based a package of rules that seek to “respond comprehensively to all the dimensions of the housing problem,” Costa pointed out.
Costa informed that the renewal of the ‘golden visas’ already granted will only be carried out if the real estate investments were destined to the holders’ own and permanent housing or to the one used by their descendants. Additionally, if the property is intended to be rented on a long-term basis, the visa may also be renewed.
Golden visas were created in 2012 during the government led by Pedro Passos Coelho with the aim of attracting foreign investors to the country. The program was meant to offer a residence authorization for non-EU foreigners granted in exchange for investments made through the purchase of real estate or the transfer of capital. Since then, the most used form has been the purchase of real estate: in 2022, more than 91% of the 11,535 residence authorizations for foreigners were provided under the criterion of real estate acquisition, whose equivalent investment was €6.041 billion.
The minimum outlay to obtain the “golden visa” through the purchase of real estate was not for everyone: a minimum payment of 500,000 euros had to be made. This meant that this visa, designed to attract investment, contributed to the rise in housing prices.
In recent years, the EU has made strong statements against residence and citizenship-by-investment programs. Those programs are currently offered in some form by 10 member states, with Cyprus and Malta already scrapping their golden passport initiatives after coming under scrutiny from the bloc, Bloomberg news reports. In the case of Portugal, applicants must have a face-to-face interview, which in the case of China has proved to be a stumbling block due to the country’s strict Covid travel restrictions.
