Is the Portugal Golden Visa Program Saved? Understanding the Portuguese Government’s Dramatic U-Turn and What it Means for Investors
The breaking news is Portugal’s Golden Visa Program might stay after all, albeit with some modifications. The latest announcement of a revised proposal bill that initially aimed to abolish the Golden Visa program takes another significant turn, adding to a rich tapestry of changes and impassioned debates that have captivated us in recent months. To understand the latest chapter in this Portuguese saga in true soap-opera style, we need to run a quick flashback to keep you up to speed with the developments.
The Main Plot
In February this year, the Portuguese government presented a package of measures to respond to various concerns within the scope of the housing policy in Portugal. Called Mais Habitação (More Housing), the package aimed at tackling the lack of affordable housing in the country, addressing concerns about rising housing prices and the impact on local communities. It was in this context that the measure of ending the Portugal Golden Visa program was grafted. This is somewhat ironic given that residential property purchases in Lisbon, Porto, and other highly populated areas of Portugal have not been eligible for the Golden Visa program since 2022 — even though property prices have increased by over 6% year on year, proving that the Golden Visa program might not be the culprit the government insists is to blame.
The Latest Plot Twist
In a surprising move yesterday, Portugal’s Socialist Party (PS), which holds the Parliamentary majority, has put forward a proposal to amend the Mais Habitação (More Housing) Bill that now aims to keep the Golden Visa Program open, albeit with no real estate investment option. This departure from their initial plans to end the program entirely has garnered attention and raised eyebrows. This is positive news, by all means, but let’s analyze it closely!
The subplot: The Golden Visa is back but with other areas in focus
Well, unsurprisingly, under the revised proposal by the same political party that proposed the total abolishment of the visa, investments of a real estate nature and capital investment through deposits and similar instruments will no longer be eligible for the program.
However, the government intends to maintain several investment options, including job creation, scientific research, support for artistic production, investment in venture capital funds, and the incorporation of a company combined with job creation.
The announcement made back in February lacked any wider explanation or detail, and we were all left somewhat in the dark as to how the government intended to end the visa. Now it seems that a new writer was brought in and decided to bring a better narrative sense into this plot — adding relevant information and explaining in detail what stays and what goes.
What it means for investors:
Moving away from the novela metaphors, the main take way now for investors is that there is a final vote on the proposal expected to be scheduled in the coming days, with indications pointing towards July 19th as the likely date. If approved, the Golden Visa program will be retained, albeit without real estate and instrument-based investments. Notably, no grace period has been mentioned thus far. The proposal will then be sent to the President of the Republic for promulgation, which could take up to 20 days or more if it is referred to the Constitutional Court.
For applicants who have already submitted their processes before the new law comes into effect, the conditions of the Golden Visa program as of their submission date will be honored. However, it is crucial to monitor the situation closely as the legislative process unfolds, as there may be further adjustments to the proposal.
Should we expect a final chapter?
The proposed amendments to Portugal’s Golden Visa Program represent a significant shift in the government’s stance on the program’s future. While initially seeking to terminate it, the governing Socialist Party now aims to introduce changes, which will hopefully help tackle the issue of affordable housing in the country. However, it is great to finally see some recognition of the immense value this program holds, and there is still much to be explored and harnessed as it continues to bring significant economic benefits to Portugal.
The upcoming vote and subsequent promulgation process will determine the fate of the Golden Visa Program and shape the investment landscape in Portugal. As the situation remains dynamic, it is essential for investors and prospective applicants to stay informed and adapt their strategies accordingly — we will wait for the next and final chapter.
