The 'Golden Visa' program (or more specifically, the D9 or ARI - Residence permit for investment activity program) is currently the subject of intense political scrutiny and debate in Portugal. The program looks set to end soon, and our current recommendations to clients seeking to invest in Portugal is to wait and see what transpires.
The D9 program was designed to facilitate the flow of capital to Portugal for a variety of perceived economic, cultural and social benefits – including entrepreneurship, job creation, scientific research, artistic grants, and investments in financial instruments and real estate (both new builds and older properties in need of refurbishment). However, despite the program's intended outcomes, in practice, more than 80% of the 11,000 'Golden Visas' were issued to real estate investors.
According to reports, more than €6 billion of global capital has been invested into Portuguese real estate in the past 10 years – primarily from Chinese and American investors. However, the economic impact of this property boom has not been universally beneficial for local citizens.
Escalating prices, both in the property rental and investment markets, mean that young Portuguese are finding it difficult to afford properties to call home. In fact, some reports suggest that Portuguese real estate has become 80% more expensive than it was in 2010.
However, there is intense debate as to whether this price escalation is solely due to the 'Golden Visa' program. "It’s a mistake to blame the golden visas on rising real estate prices as this is mostly due to an imbalance between supply and demand,” said Paulo Silva, the head of the Savills consultancy in Portugal. Golden Visa investments "only account for 3% of property deals at most," he said.
Some argue that a more the crucial factors are 1) Portugal's 'digital nomad' program, and 2) the proliferation of properties which are only available to rent on the short-term market. Some estimates suggest that more than "60% of the available property market in Lisbon consists of short-term rental" properties, and not all of these are owned by non-Europeans ('Golden Visa' investors have not been able to buy property in Lisbon since Jan 1, 2022).
Living Luxury Real Estate's Perspective
For those who are not seeking a second residency, Portugal remains an attractive investment destination, for its attractive lifestyle and beautiful properties. However, for those of our clients seeking a second home that blends a beautiful lifestyle, residency benefits, and capital appreciation opportunities, we recommend looking closely at both Greece and Italy.
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Casa 27, Portugal by Mario Martins Atelier. Photograph by Fernando Guerra | FG+SG
