Portugal’s government has decided to extend the deadline to exclude investments in Porto and Lisbon from the country’s Golden Visa Scheme from July 2021 to January 2022.
The announcement comes after the authorities in Portugal, in December last year, had sought to ban investments in both cities and the region of Algarve in order to encourage investment in less popular areas, SchengenVisaInfo.com reports.
According to some agents, six more months available for all applicants to invest, are expected to boost inquiries for homes, especially from Hong Kong citizens interested in permanent residency in European countries.
Last year, home prices in Portugal increased by 5.9 per cent, making housing costly for many locals amid the rapid spread of the Coronavirus pandemic.
In 2020, the unemployment rate marked a 6.8 per cent increase compared to 2019 figures (6.6 per cent) due to the devastating situation resulting from the Coronavirus outbreak.
“When the Portuguese government introduced the deadline of July 2021, Hong Kong buyers were hesitant to commit as they felt they might not have enough time to do the transaction and then fly to Portugal to complete the necessary biometrics,” Chitra Stern, founder, and owner of Elegant Group, developer of a branded residence project in Lisbon, Martinhal Hotels & Resorts and Martinhal Residences, pointed out.
She said that the latest Portugal’s government decision lifts this barrier, stressing that they expect to have more inquiries now.
According to the managing director at Lisbon-based Maia International Properties, Luiz Felipe Maria, who has an office in Hong Kong, the recent move will give investors more confidence regarding their applications, as, according to him, ten and a half months is a very comfortable time frame.
In January, Portugal’s Council of Ministers unfolded their plan to update the residency-by-investment program. The Council of Ministers back then agreed on the new changes in the Golden Visa under the legislative authorization granted by the State Budget Law of 2020.
The main reason for the presented changes was to promote internationals’ investment in low-destiny areas, particularly through urban rehabilitation, activities of high environmental, cultural heritage, etc.
Such changes had been planned to take effect on July 1, 2021; however, the government decided to extend the deadline until January 2022.
In 2020, the country issued a total of 1,182 golden visas, while 296 permits were granted to China and Hong Kong citizens, making them among the top beneficiaries of the program, based on official data.
As for property investment, they reached €646.7 million during last year, marking an 11 per cent decrease from a total of €742 million registered in 2019. In January, Portugal granted 55 residency permits while China’s citizens accounted for about half.
The figures of Serviço de Estrangeiros e Fronteiras (SEF) published in September revealed that the country’s funds brought through the scheme marked a 43 per cent decline in July, year-on-year, and 37 per cent drop compared to June figures.
Through the Golden Visa Program, internationals are eligible to invest at least 500,000 in Portugal in order to receive a residence permit. Investors must spend a week in the country during the first year and two weeks during the next two years to keep their residency.
Even though the Golden Visa Program offers great opportunities for investors, the scheme is often criticized by the European Union Commission and many organizations for the way it functions, not only in Portugal but also in Malta, Bulgaria, and other countries.
Residency by investment program is often considered as a gateway to Europe for corruption and money laundering.