Portugal Cuts Golden Visa Program to Address Affordable Housing

Portugal has become the second country in Europe to stop its Golden Visa Program this week, following Ireland's announcement on February 14 that it will close its Immigrant Investment Programme (IIP), often known as the Irish Golden Visa.

The decision to remove the Portuguese Golden Visa is part of a larger package of measures to address the country's housing problem, which was announced by the Council of Ministers on Thursday, February 16.

The Council read out six provisions from the package during the press briefing. The fourth step includes the decision not to issue new Golden Visas while allowing "current ones to be renewed, if they are real estate investments, exclusively for own and permanent home, or if it is placed on the rental market for a long period."

While the government says that the programme is not a major cause of rising house costs, it believes that eliminating it is the best way to address estate speculation.

Despite a 41.9 percent rise in investments made in Portugal under the Golden visa programme in 2022, reaching a total investment value of €654.2 million, the decision was made. Yet Portugal's total profit from this programme since its inception in 2012 is as high as €6.9 billion.

China, Brazil, Turkey, the United States, and South Africa are the leading countries of origin for Golden Visa recipients.

Golden visas will not be the only ones impacted by the Portugal Council's new housing package; short-term rentals such as Airbnb and Booking will also be impacted owing to a licence ban.

“The current licenses will be reassessed in 2030, and thereafter there will be periodic reassessments; the issuance of new licenses will be prohibited, with the exception of rural accommodation in interior municipalities where there is no urban pressure and where they can contribute to the economic dynamism of the territory,” the package reads.

According to a recent study, only Milan and Paris have higher housing rents than Lisbon. According to the analysis, rents in Lisbon climbed by 36.9 percent in the fourth quarter of 2022 alone.

Plans to remove Portugal's Golden Visa have been debated by the country's officials for more than three years, after it was harshly criticised by EU authorities, along with other Golden Visa programmes run by several other EU Member States, notably the Greek Golden Visa Program.

Spain may be the next country to remove its Golden Visa, at least partially, in the coming months, as its political group Más Pas has submitted a bill to the Congress to do so, claiming that the practise has driven up house prices in the country.

By fLEXI tEAM