New Golden Visa Rules in Portugal?
A revision of rules for the golden visa in Portugal has left many potential applicants confused as to the rules and a great deal of misleading literature posted on the web suggesting the Portuguese golden visa limit has been reduced, but is not, this reduction may causes some delays and more work to do.
The qualifying real estate investment level for the golden visa in Portugal is €500,000. Earlier this summer the Portuguese government introduced a new investment level of €350,000 for certain categories of real estate.
The law states the following: “Acquisition of immovable assets, the construction of which has been completed, at least, 30 years ago or located in an area of urban regeneration and execution of refurbishment works in the acquired immovable assets…equal to or above 350 thousand euros;”
The point here is that even though this new option applies, it only applies to property that is over 30 years old or located in an urban regeneration area. It involves the execution of refurbishment works. This is an important aspect.
To qualify for the golden visa under such an investment requires the necessary:
- permissions for renovation work on the building
- permissions and payments to contractors all need to be done legally and of course within the tax structure so the necessary paperwork, proofs and payments are fully in order.
- To undertake such a project would mean employing project managers and the necessary architects.
- The applicant would have to have all the licences in place prior to any application being submitted which will of course delay any application for the visa. To mitigate any risk it is vital to ensure that any such property would qualify within this category.
Clients would need to ensure they build sufficient time into their schedule to take care of all these additional aspects.
Clients visiting to invest €500,000 in a location such as Lisbon can usually complete the necessary tasks within a few days, accompanied by ourselves and our lawyers in a methodical, established and time proven manner.
The alternative investment of €350,000 will require far more time and hands on management. Golden Visa applicants should be wary of companies offering such management for a fee and in particular remain conscious of the scope for overpaying for assets requiring reconstruction without the necessary independent professional advice from architects and surveyors.
For any international client not residing in Portugal and trying to manage from a distance it can be problematic, time consuming and expensive.
The €350,000 is reduced by a further 20% to €280,000 for renovation in low density, less developed areas of the country. This naturally does not apply to the cities or the more populated coastal regions creating issues for any future rental income potential.