Housing prices in Lisbon have pushed locals out of the market
One of the most sought-after Golden Visa programs in Europe granting Portuguese residence to non-EU nationals in return for buying real estate and other investments in the country has been officially terminated.
The decision to end the granting of golden visas in exchange for investment, which gives wealthy people residency permits and access to the European Union’s borderless travel zone, was announced on February 16 by Portugal’s Prime Minister, Antonio Costa.
His government, he said, will stop issuing new golden visas in order to “fight against price speculation in real estate.”
Buying the right to residence
The golden visa programs, used worldwide to attract foreign investment and offered around Europe by countries eager to draw capital and boost tourism, enable wealthy foreigners “essentially to ‘buy’ the right to residency – sometimes without even having to live in the country,” as explained by Euronews.
As their popularity grew so, too, did controversy along with efforts by the E.U. to curtail them because of their “risk to security, permitting money laundering, tax evasion, terrorist financing, corruption and infiltration by organised crime, that is incompatible with EU norms.”
The European Parliament’s Civil Liberties Committee has denounced the schemes as “objectionable from an ethical, legal and economic point of view.”
Governments have also been facing internal protests as real estate prices, especially in the most popular destinations, keep rising, pushing local residents out as foreigners buy houses and apartments to rent via services like Airbnb.
Portugal’s housing crisis
“Portugal’s decision to end the scheme was driven by angst over a surge in house prices that has left many local residents struggling to find adequate accommodation, particularly in Lisbon and Porto, the biggest cities,” reports the Financial Times.
The end of the golden visa program in Portugal is one in a package of measures intended to alleviate the housing crisis and includes a ban on new licenses for Airbnbs and other short-term holiday rentals, except in remote locations.
“Rents and house prices have skyrocketed in Portugal, which is among the poorest countries in Western Europe,” according to Reuters. “Last year, more than 50% of workers earned less than €1,000 per month while in Lisbon alone, rents jumped 37% in 2022.”
It’s estimated that the end of the scheme would cost at least €900 million ($962 million) to the country, which has enjoyed €6.8 billion in investment since its launch in 2012, with the bulk of the money going into real estate.
According to the primer minister the decision will be approved next month.
Irish passport
Following Ireland
Portugal’s decision follows Ireland’s that a week earlier axed its golden visa scheme or “Immigrant Investor Programme,” which offered Irish residence in return for a €500,000 investment or three years of an annual €1 million investment in the country.
Ireland had already suspended the scheme for Russian citizens in March 2022 among its sanctions for the invasion of Ukraine.
Since it started 11 years ago, the program — which has been used mainly by wealthy Russian and Chinese investors — has attracted €1.25 billion.
Spain is coming closer to ending its golden visa program due to the housing crisis in places like … [+]
Spain to follow?
The controversy in Spain around the golden visa has been growing as well and a bill has been submitted to congress to scrap the Golden Visa by purchase of property.
The Spanish left-wing political party, Más País, wants to eliminate the country’s Residence by Investment scheme for foreigners due to its impact on housing prices, pushing nationals out of the market especially in the big cities and most popular tourist destinations.
The scheme was introduced in 2013 in Spain and it enables foreigners to obtain a Spanish residence permit by purchasing real estate worth at least €500,000 in the country, SchengenVisaInfo.com reports.
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