Photo: Chris Yunker
Portugal’s Golden Visa scheme is increasingly being used to fuel regeneration of Lisbon’s property.
According to the latest figures from the SEF (Serviço de Estrangeiros e Fronteiras) 2014 was a record year for Portugal with 1526 successful Golden Visa applicants in total, thanks to the residency scheme.
A Portuguese Golden Visa allows nationals of countries outside the Schengen area (non-EU) to acquire a residence permit in Portugal via investments in Portuguese territory. Just like any other holder of a residence permit in Portugal, Golden Visa holders can move freely in the ‘Schengen’ area and may also apply for ‘family reunification’, enabling their immediate family to also acquire a Golden Visa.
Between its launch in October 2012 and the end of June 2015 the Portuguese Golden Visa scheme attracted €1.47 billion of investment, of which €1.33 billion (90%) of this was through the purchase of real estate, accounting for 2,289 Golden Visas. By comparison, the Spanish equivalent of the scheme generated around €700 million, granting 530 foreign buyers with a visa between its launch in September 2013 and March 2015.
Now, the government has reduced the minimum required amount for those investing real estate to apply for a Golden Visa to €350,000.
“It was already the most popular scheme of its kind in Europe, but the government wants to cast the net wider,” says Nicholas Leach at Athena Advisors. “Spain and Greece launched similar visa systems in 2013 and have taken some of the market share, so the authorities are using properties in regeneration areas across cities like Lisbon to inject more interest in the scheme.”
This year there has been less of a response, with only 398 successful applicants in the first six months.
“After the initial surge of investment into the scheme, there was bound to be a let up in demand,” adds Leach. “The demand of immigration incentives peaks and troughs, and this is why the government has shaken up the terms, to try and keep the rhythm going.”
“Some Golden Visa investors have looked to the Algarve and Silver Coast north of Lisbon, but Lisbon’s city centre has been the main target due to the value and potential uplift,” continues Leach. “Prime properties here are a third of the price of their London and Paris equivalents, and if you look towards central regeneration areas like Mouraria there is even more value.”
Following the recession of 2008, much of Lisbon’s city centre fell into disrepair as both businesses and people left the city. Developers have targeted these areas over the last few years, renovating historic properties and even entire districts, upgrading real estate to international standards, thus enticing Golden Visa investors.
“Golden Visa buyers wants properties which are easy to maintain, so only new-build or renovated properties will do,” adds Leach. “Most of the city centre’s sought after districts fall within the boundaries of the urban rehabilitation area. Areas like the prime and central Liberdade, trendy Chiado & Baixa and historic Mouraria will likely see increased interest from overseas due to the new minimum investment amount. Properties which are over 30 years old also apply to the lower amount, but Golden Visa investors are unlikely to opt for this route as older properties often require expensive renovations.”