Thatās not quite right. The proposed law would let locals and other property owners keep (or acquire) second homes/holiday homes, even if these are only used once a year. Itās only if they are vacant for more than a year that they may be forced to rent them out.
But GV holders wouldnāt be able to renew if their properties arenāt someoneās primary residence (their own or someone elseās). So in that sense itās definitely GV holders that would be discriminated against if the law passes as proposed.
I bought a property at the 280k level and submitted my application in September 2022. It sounds like Iāll be fine so long as my property isnāt a short term rental? (Itās not.) but how is long term defined? I saw something about 5 years? Or 3 years? Or what?
The PM announcement and the draft law references 5 year leases (annual does not count).
The 3 year confusion comes about because the draft law basically says that to prove that the GV holder satisfied the 5 year lease / primary home requirement, an acceptable evidence is a 3 year lease document / tax filing respectively. This makes it seem like a typo (since 5 is referenced everywhere except this one spot), perhaps they were considering 3 years earlier and failed to update this when they decided on 5.
Thanks. That strikes me as so odd (as an American). Are 5 year leases common? Why would a 5 year lease suffice but not 5 annual leases?
I specifically bought a non-short term property so I could contribute more to a long term housing market, but the lease isnāt 5 years. What do I tell the current tenant now? āRe up for 5 years or leaveā?
I actually need to walk back what I said ā my lease may be five years. That would make sense, because that is also the length of my contract with my property management company. Will double check.
Longer-term leases give the tenants opportunity to negotiate lower rents and lock them for longer time periods. There are not too much room for rent escalations - that is most likely the primary rationale. However, currently, the most ātypicalā lease is about 2 to 3 years. One year leases are frown upon by the landlords.
Also, FYI, a tenant has a right to ājumpā the lease with no repercussions after completing 2/3 of the rental contract.
I personally think everyone needs to de-couple a bit the two issues: end of Golden Visas and Housing Crisis. The first one has been under much pressure from E.U. which considers it a āback-door to Europeā. The second - an on-going saga that has been perpetuated by Portugalās phenomenal recovery from the āGreat Recessionā of 2008 - 2012.
Most likely, Golden Visa programme will come to an end in an orderly fashion. Portugal knows and values its positive impact of much needed cash influx. Itās termination will be missed by many in Portugal who will demand time to adjust. I seriously doubt that retroactive legislation would be applied to those already in the system.
The Housing Crisis will continue in the foreseeable future. There are just too many factors in play to be solved by one simple piece of legislature. Portugalās government also knows it, and they will have to tackle many systemic problems that makes Portugal what it is: Portugal!
The key reason to combine the two is score much-needed political points for the Socialists to keep their majority. This text is aimed predominately at the popular discontent with the current state of affairs and to appease (or neutralise) the extreme political fractions on the left (PCP) and on the right (PRN). Hence, I would not render too much credibility to the first draft of this law - wait for the parliamentary debates and the ultimate outcome. This is not the first time this issue has surfaced, and not the first time it has been defeated or modified in the Parliament.
If you are considering Portugal, have patience, and plenty of it!..
Yes, you ask your tenant to sign a 5-year contract.
So your obligation as a landlord will increase, while his obligation as a tenant will not change, as the break clause will not be symmetric, i.e. the tenant can move out much sooner than 5 years. I am sure an estate agency will have the ācorrectā template for you.
I meant for GV purposes. If we have a tenant sign a 5 year lease and they leave after 2, that doesnāt seem to satisfy the requirement of this draft legislation. Am I wrong?
It would satisfy, youād just need to find your next tenant and sign them up for the next 5 years.
So that keeps your property āoccupiedā in the eyes of the (future) SEF.
I wouldnāt want to go after them. Iām a strong believer in tenant rights. Iām just worried about the continuity. If I have a 5 year lease and they leave after 1, how will it impact my application/renewal? How much āgraceā period do you have to find a new tenant?
Generally, after living in Lisbon for about 5 months now, they are not rally big sticklers to the time-lines. As long as you can demonstrate reasonable efforts to remedy the situation, i.e. making the property ready and available for new lease, they will leave you alone. The key in Portugal is to keep every piece of paper to justify your efforts, actions, etc. Most of the time, once they see that you have tried, they will accept it with no further questions asked. Things donāt move fast there, and their expectations of timelines are very tame.
Another statement from the Portuguese Association of Residential Tourism and Resorts (APR)ā¦
They try to quantify losses to Portugal from ending the ARI; say itās unfair to change renewal terms given that people have already invested; argue the 16th Feb deadline is unconstitutional; and highlight the issues weāve discussed about non-residential investments.
And quite a long article here, on GVs but also the wider housing issues. The writer interviews the head of Kleya, a relocation/investment advisory firm, who expresses concerns about risks to Portugalās reputation for trustworthiness and reliability. Also talks to the Portuguese Association of Investment Funds, Pensions and Assets (APFIPP).
