Portugal to scrap Golden Visa permits and ban holiday rentals

Raymundo Larraín Nesbitt, March, 23. 2023

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For years, I have praised and commended in my articles the economic policies adopted by Portuguese Socialist politicians. These economic and housing measures have greatly contributed to attract vast foreign investments (over 6 billion euros in Golden Visas alone), have created thousands of well-paid jobs, improved the country’s overall business reputation, and in effect boosted Portugal’s GDP. Portugal was the leader, the example to follow by other countries, including Spain.

Alas, times move on, and the winds of change blow. A majority left-wing is now in power, and they wish to change things. Their majority will confidently allow them to pass new radical laws in parliament more in line with their electorate. A draft bill has been submitted to parliament that would in effect break the existing status quo in Portugal on foreign investments and visas introducing major changes I collate below (source):

Scrap Golden Visa permits, following a budding trend in other EU countries i.e. Ireland
Ban outright new holiday rentals
Not renew existing holiday rental permits when they expire
State-imposed, planned rental prices (no longer determined by private individuals/landlords), on rental agreements. This means rental prices will be capped and determined by the government
Increase the duration of rental agreements to a mandatory 5 years
Town halls will be empowered to seize empty homes (defined as unoccupied for over 100 days) and offer them as ‘social housing’ to the locals
Local Authorities will be able to request property owners to contribute towards (imposed) property improvements
Etc.

You don’t need a degree in economics to realize how bad the new proposed measures are for Portugal, the economy, and ultimately for its society in general. These new measures are what communist elements in the Spanish government (Podemos) have wet dreams of doing in Spain.

It’s a real shame what the Portuguese government is bound to approve and, in my humble opinion, I think it will greatly deter and discourage foreign investments in Portugal. I foresee a sharp drop in pastéis de nata consumption and a spike on gazpacho demand.

However, as the saying goes, one man’s meat is another man’s poison. The silver lining is that these foreign investors will look elsewhere and may be attracted by Spain’s free market low taxation areas, such as Madrid and Andalucia. These two regions in Spain have suppressed Wealth Tax and Inheritance Tax (besides tweaking a myriad of other taxes, including personal income tax, toning them down; some even go as far as speaking of ‘Spanish tax havens’). Not to mention that Golden Visa residency permits are more than welcome by the Spanish Government, which rolls a red carpet for them. Perhaps I should apologize for my schadenfreude. I make a mental note to add it to my to-do list.

At Larrain Nesbitt Abogados we have over 20 years’ experience buying, selling, and renting properties. We are also specialized in immigration & residency visas. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88, or by completing our contact form to book an appointment.

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