Portuguese Association of Residential Tourism and Resorts calls for study on impact of end of ‘gold’ visas and suggests alternatives
TLDR on the alternatives?
- Increase the minimum investments required, in order to bring Portugal on par with other programs and to create more tax income for the state
- Impose a surcharge on the acquisition of touristic properties, which can be used to fund the construction of affordable housing
- Create a new investment category for the creation of affordable rental properties
- Eliminate the term “golden visa” which has become a “toxic” term
Ty! Those are good suggestions.
Some more details of the initial proposal have been published:
Changes GV 2023 - March 4th.pdf (782.5 KB)
Note: this is not taking into account the feedback that has been provided so far in the process
Seems to me that this says (broadly):
- anyone who applied by 16th February will have their applications processed, but later applications are invalid
- renewals for GVs connected to real estate investments will only be allowed if the property is leased for 5 years or is for personal use
- no changes to renewals for other GVs (e.g. fund investments)
Corrections and other interpretations welcome. And as Prime Legal says, this is all subject to legal challenge, amendment, etc.
Pretty harsh, if not unexpected, to call Feb 16th the cutoff for applications. I say “not unexpected” because we are all seeing what happened when small rule changes were announced in 2021: people crush the system trying to apply. Doesn’t surprise me the govt is trying to avoid ending the program with a huge surge of applicants.
Also kinda harsh, and presumably the unconstitutional portion, is changing the real estate renewal rules for people already in the system. But not entirely unworkable if enforced. I am sure someone will create a leasing group on Weibo where everyone “leases” everyone elses properties for five years and no money changes hands.
Otherwise not too painful. Everyone in the system gets to finish up (hopefully with automatic renewals). Certainly not the apocalypse we are worried about.
Hope for the best and prepare for the worst.
Can someone help to explain how this 5 year lease requirement will work for rehabilitation projects where they are still under construction?
The big question here is what happens to commercial real estate, e.g. Mercan hotels. Are they required to lease the hotel rooms out for 5 year intervals, effectively turning the hotel into residential real estate? That hardly seems practical.
Yeah, I can’t see how the proposed wording would work on a practical level. Technically you’re leasing your part of the hotel to the operator, but of course it’s not anyone’s primary residence.
Also not sure if I read the proposal as any application past Feb 16 being invalid, just a guarantee that applications prior to that will be unaffected. But legalese isn’t my first language (and neither is Portuguese), so …
There is nothing specifically stating that people in investments other than real estate (e.g. buying real property) are eligible to renew. The paragraph 2 of Article 32 could be read to mean they can’t. Let’s wait a few more weeks to see what they come up with as I hope they will clarify things in a positive way.
Also, when it mentions “awaiting a decision form the competent authorities…” does that mean awaiting pre-approval or awaiting final approval?
There is so much wrong with this on so many levels it is hard to comprehend.
My reading was that (a) the new law revokes in their entirety the previous legal provisions for GVs (the definitions in the old Article 3, and the whole of old Article 90-A), (b) then new Article 32 carves out an exemption for applications that were pending a decision on 16th Feb, regardless of investment type, and also for the renewal of permits, and then (c) new Article 31 imposes additional conditions on renewals for real estate.
I think on this text, an application filed on 17th Feb falls, because GVs cannot be granted once this law is passed, except for those specified in the Article 32 carve-out.
My own view is that 32(2) does give a path for renewal of GVs backed by fund investments, because it links applications that were pending on 16th Feb (regardless of investment type) in 32(1) with renewals of the same.
But I’m not a lawyer either, and I don’t think the drafting is particularly clear, at least in translation… I agree with Garbonzo, let’s see how this all pans out.
So the question is how to prove the property you own is for personal use. We own a property in a touristic exploration resort but are not renting it out throught the resort so how do we prove this for renewal?
I don’t think anyone knows. The law seems to assume everyone has bought a single flat or villa. It’s completely unclear how this all applies to investors in hotels etc. You could even I think qualify for a GV with an investment in a shop or office building - supposedly you now have to show that it’s leased for housing purposes. Baffling. I assume that this language will have to be amended as the law goes through parliament.
Well, this here draft states that:
"The following are considered supporting elements for the purpose of renewing the residence
permit provided for in the previous number:
a) Registration of the lease agreement with the Finance Portal, in the case of properties rented for
a period of not less than three years;
b) Document attesting the tax domicile, in the case of properties intended for the owner’s or
his/her descendant’s permanent residence."
So yeah, it’s like you rent it out long-term or become a PT-tax resident with your PT property registered as your tax residence address with AT. Or you can send your ‘descendants’ to tax-reside in PT.
Why they say 5 years in one place but then 3 years in another is beyond me…
But if we live in the US most of the year we wont be able to be full time PT tax residents so that disqualifies us for renewals even though we literally own the property and use it for ourselves? Makes no sense.
That is not true.
Existing Portuguese tax law considers you a tax resident if you spend at least 183 days in Portugal OR if your primary residence is in Portugal.
The updated Golden Visa law seems to explicitly use the latter’s wording to compel you into tax residency.
You would then be tax resident in multiple countries - very common for Americans, as the US considers US citizens a tax resident even if you don’t spend a single day in the US.
But if we live outside of Portugal most of the year how can we claim our Portuguese property as our primary residence?