Portugal’s economy is making a comeback with property prices on the rise. The European country is setting up a future to help safeguard against economic downturns as experienced in the past. One of the reasons for this economic turnaround is the country’s promotion of property ownership to foreign investors through its Golden Residence Permit program. Property owners in Portugal through this program get to enjoy the Portuguese lifestyle as well as obtain visa-free entry into Europe’s Schengen zone.
The Golden Residence Permit program was launched by the Portuguese government in 2012 as a means of attracting overseas investors to the country. Once received, the residence permit grants investors the opportunity to either live in Portugal with their families, or just spend some time there. In fact, the program’s physical residency requirement is only seven days within the first year and 14 days in the two years thereafter.
One of the investment options for acquiring the Golden Permit is the purchase of a real estate property for a minimum of €500,000. With a single property purchase, investors can obtain a visa for themselves and their dependent families.
What’s even more appealing is that those who register as non-habitual residents do not have to pay any tax in Portugal on foreign income for a period of 10 years from the date of registration. A non-habitual resident is an individual who a) has not been a resident in Portugal for the past five years, and b) has either remained in Portugal for more than 183 days, OR has a home on December 31st of that year and is in a condition that it can be assumed the intention is to keep the home and occupy it as a habitual residence. In simple terms, acquiring a suitable property under the Golden Residence Permit program would qualify an investor as a non-habitual resident, and a decade-long overseas income tax exemption would apply.
Portugal’s plans with the Golden Residence Permit program are certainly paying off. Approximately 2,700 permits were issued between the program’s introduction in 2012 and July 2016, according to statistics from Portugal’s immigration office. Doing the math, if every investor made the minimum required investment of €500,000, this would mean that the program has already generated over €1.35 billion for the Portuguese economy. In addition, the program is gaining momentum. In the first six months of 2016 alone, 821 Golden Permits were approved. This is more than the total number of permits approved in 2015.
While Chinese investors were the first to dominate the Portuguese permit scheme, applications from the Middle East are starting to catch up. There are many factors that make Portugal an ideal investment opportunity. The beautiful weather, picturesque landscapes, and family-centered atmosphere are just the beginning. House prices are rising; however, compared to many European countries, prices are still very low. The non-habitual resident tax benefits make Portugal an extremely attractive option for foreign nationals who wish to safeguard their wealth. Another popular option has been to purchase properties to rent out as a supplemental source of income. Demand from tenants is on the rise, with insufficient supply of rental properties.
One Middle Eastern investor commented, “We fell in love with Portugal within 24 hours on our first visit, and within three days had put an offer on our house. The people are lovely, the weather is great and we can achieve a high standard of living in the Algarve.”
For the ultra-wealthy foreign nationals who are looking to indulge, Portugal has enough luxury villas to please anyone’s taste. €1.2 million can buy a seven-bedroom villa with a pool and guest house in the beautiful Algarve, while €4.5 million can buy a villa with its own private beach. The next owner could be you.
For more information on Portugal’s Golden Residence Permit program, please click here.
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