Portugal Golden Visa News - is this the end?

The Portuguese Government officially announced the plans to end the Golden Visa Program. The announcement was made in the context of the presentation of several measures targeting the current housing crisis and with the intent of combating speculation in the real estate market.

Although a specific timeline remains unclear, grandfathering provisions are expected to be introduced for those that have already concluded investments and submitted applications by the time of publication of the final law (which we understand may still take at least two months).

Nevertheless, according to the latest Draft Law that has just become available, only the Golden Visa applications submitted before the 16th of February 2023 will be processed. We will be monitoring this information, as the draft law is in public discussion and remains subject to amendments. Prospective applicants should consider waiting for the final Draft Law to enter the Parliament and monitor entry in force and grandfathering rules – please refer to the timeline below for further information.

For the avoidance of doubt, the changes in the pipeline refer only to the Golden Visa regime (which is a residence permit) and do not impact, in any way, the Non-Habitual Resident regime (which is a tax regime).

* Last updated: 10 March 2023

Is this the end of the Golden Visa in Portugal?

In principle, yes, for all types of Golden Visa applications. The Prime Minister clearly said that the program has fulfilled all the objectives and that it is time to move on and promote other types of programs.

Nevertheless, the fact that we are in early stages of discussions means that the exact terms or conditions of the termination are mainly unknown.

There are calls, for instance, to maintain the Golden Visa for other types of investment (e.g. investment in cultural patronage). Still, these were not addressed by the Prime Minister, mainly because the termination of the Golden Visa was announced in the context of several initiatives targeting the housing crisis.

What we know about the end of the Golden Visa in Portugal

We only know two simple points:

• there is a declared and strong intention of the Government to terminate Golden Visas through investments in real estate; and
• renewals of Golden Visas already granted will be subject to some requirements, namely the beneficiary (or a descendent) having the real estate acquired as its primary residence or having the real estate in the long-term rental market (i.e. excluding short-term rental).

What we don’t know at this time

Several aspects require clarification, such as:

• What is the exact timeline? Will there be a transition period?
• Will the termination (terms and timeline) apply equally to the entire Portuguese territory (for instance, the Regional Government of Madeira has expressly stated that it wants the Golden Visa programme to continue, and there is the precedent of previous amendments not applying equally to the whole territory)?
• On the renewal of the Golden Visas and the requirement of having the real estate as the permanent residence of the applicant, what will happen in cases where the investment was diluted in several properties?

None of these questions (and many others) are answered for now.

Timeline – what happens now?

The plans are now in public discussion for one and a half month and are entirely open to amendments, inputs, and contributions from the relevant players.

Although this is a mere estimation, we can summarise the next steps as follows:

• Meeting of the Council of Ministers of 30 March – approval of the final bill of law further to the ongoing public discussion;
• 31st of March – final bill of law enters the Parliament and is subject to further amendments by the political forces;
• 1 to 3 months after the previous step – the final bill of law is approved by the Parliament;
• 1-2 weeks after the previous step – President ratifies the Parliament law and sends it to publication (unless there are constitutional issues on the bill, for instance);
• 1-2 weeks after the previous step – the Law is published and enters into force, with a transitional period likely to be introduced.

Nevertheless, a complete turn of events (i.e. having the idea of scrapping the Golden Visa program abandoned) appears unlikely at this stage.

What alternative do you have?

The Golden Visa is one of several residence permits available in Portugal. The alternatives will depend on your objectives and if you have already decided to apply for a Golden Visa in Portugal, the stage of your process. Considering the number of unanswered questions and the timeline for what’s next, here are some of the alternatives for you to consider now:

Aside from the Golden Visa, Portugal has several attractive residency programs, such as the new Digital Nomads visa, targeted at remote workers wanting to live and work in Portugal, the D7 (for applicants with mainly passive income, such as pensions or dividends), the D2 (for entrepreneurs or freelancers) and the Start-up visa.

The Prime Minister emphasised that Portugal wants to keep its attractiveness for foreigners, and substantial investment in public services is in the pipeline to fast-track and digitalise the visa processing. 

Final thoughts on the end of the Golden Visa in Portugal

As of the date of this communication, the SEF platform for the submission of applications is still active. However, the draft bill made available provides for the termination of the regime with effect from 16 February 2023, with applications submitted after this date running the risk of no longer being considered.

In these terms, investors should take into account the current uncertainty when making investments based on the law currently in force, in order to ensure the legal protection of their rights.