Portugal Ends Golden Visas for Housing Investments – A Significant Shift in Immigration Policy

In a significant development, the Portuguese government has approved a proposal to put an end to new residential permits for investments in housing. This move was part of a housing scheme named “More Housing,” and it specifically targets the so-called “golden visas.”

The Golden Visa Scheme

The term “golden visas” refers to residence permits issued to non-European Union investors who make substantial investments in Portugal’s real estate sector. Over the years, these visas have been an effective strategy for attracting foreign investment. Since its launch in 2012, the program has brought in over €5 billion ($5.5 billion) in investment.

The Decision to Terminate Golden Visas

The decision to terminate the golden visa scheme was announced by Prime Minister António Costa on February 16 during the first presentation of the “More Housing” programme. According to him, out of the approximately 11,000 golden visas granted, more than 9,000 were solely dedicated to real estate investments.

Prime Minister Costa went on to add that there was an “almost zero rate for job creation and a very low contribution to other activities” associated with these visas. Hence, the decision to end the scheme was a means to combat real estate speculation.

The Parliamentary Debate over the Decision

The decision to put an end to golden visas for housing investments split parliamentarians across the political spectrum. On one hand, parties such as PS, BE, and PCP voted in favour of the proposal. On the other hand, parties including PSD, CH, and IL were against the measure, resulting in heated debates in the Assembly of the Republic.

Notably, the government’s initial proposal admitted new requests for residence permits for investments or support for artistic production and the recovery or maintenance of the national cultural heritage. However, the PS, which supports the parliamentary majority, proposed the elimination of this exception, thereby extending the reach of the new rule.

Impact of the New Law

While the new law signifies the end of golden visas, it won’t affect the renewal of already granted authorisations. Applications for granting and renewing residence permits for investment activities will remain valid. This includes those that are “pending prior control procedures in Municipal Councils” at the date of entry into force of the law.

Additionally, the granting or renewal of residence permits for family reunification is exempted from the adopted limitation, ensuring family ties are not severed due to the new law.

This new legislation marks a significant shift in Portugal’s approach towards attracting foreign investments. As the nation ends its golden visas program for housing investments, it signals the prioritization of strategic and balanced growth over unregulated capital inflow. The decision will likely lead to a readjustment in the country’s real estate market and could influence similar immigration-investment schemes across the world.

From a broader perspective, the conclusion of Portugal’s golden visa scheme is reflective of a growing global sentiment around immigration policies. More countries are reevaluating the benefits and drawbacks of offering residency or citizenship in exchange for investment, marking a changing landscape for global mobility. The Portuguese case offers an insightful example of the complexities at play when economics, immigration, and housing policy intersect.

FAQ

Q1: What are Portugal’s Golden Visas?

A1: Portugal’s Golden Visas are residence permits granted to non-European Union investors who make significant investments in Portugal’s real estate sector.

Q2: Why has Portugal decided to end the Golden Visa program?

A2: The decision to end the program was made to combat real estate speculation. The government noticed that these visas had an almost zero rate for job creation and a very low contribution to other activities, hence, the decision to terminate.

Q3: What happens to already granted Golden Visas?

A3: The new law does not affect the renewal of already granted Golden Visas. Applications for granting and renewing residence permits for investment activities will remain valid.

Q4: What impact will this new law have on the real estate market?

A4: The termination of the Golden Visa program may lead to a readjustment in the country’s real estate market, reducing the influx of foreign investment.

Q5: What exceptions does the new law make?

A5: The law excludes the granting or renewal of residence permits for family reunification from the adopted limitation.