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What should I think about when choosing a low density area in Portugal to invest in for residency?
I'm planning to gain residency by investment in Portugal sometime next year when more attractive areas like Lisbon, Porto will off the market for international investors. Is there any particular area, like Aljezur or Douro Valley, in low density areas that are expected to be more popular with investors? What would you advise me to do if I'm looking to get a good return on my investment as well as residency in 2022?
Answers
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The Portuguese Residence Program for Investment Purposes (Golden Visa) integrates several different types of investments that qualify for an application. Among those are: the purchase of a real estate property with a value equal to or above 500,000 euros; or the purchase of a real estate property constructed more than 30 years ago, or located in urban regeneration areas, for refurbishing, valued at a minimum of 350,000 euros. Such investment amounts can be reduced by 20%, when the investment is performed in a low density territory. A specific list with all the territories that qualify for this “discount” does not exist. Therefore, before investing, the chosen area must be analyzed in order to understand if it qualifies under one of those requirements. Unlike the residential real estate type investments, where the investment itself is achieved by simply purchasing real estate (via a minimum investment amount of 500,000 euros, or 400,000 euros with the 20% discount), the investment in a real estate set for refurbishing/rehabilitation purposes demands that you not only buy the real estate, but also pay for the rehabilitation works (minimum investment of 350,000 euros, or 280,000 euros with the 20% discount). Also, one other important matter is the ultimate purpose of your investment in the real estate: is it an investment in a residence where you yourself will reside, or is it an investment for providing accommodation services like local hosting, hotel services etc.? According to latest changes in the Golden Visa program, from Jan. 1, 2022, onwards, only an investment in a real estate for to be used as residence for oneself would be eligible for the Golden Visa application, provided the real estate is located in the Autonomous Regions of the Azores and Madeira or in inland low density territories, which then solely leaves the possibility in Lisbon and Porto for an investment in real estate for the purpose of accommodation services (local hosting, hotel services, among others). Any of the above mentioned investments can be performed individually or in co-ownership with other investors, provided the minimum investment amounts are granted by each of them. Regarding this last option, there are a number of promoters and developers in Portugal whose projects are financed this way, and also take care of all the legal procedures before the Portuguese authorities towards your residence permit issuance. I would advise this last option as being the best and most efficient way to have a Portuguese residence permit granted to you by means of the Golden Visa program.
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From 2022, real estate investment via the golden visa will only be possible in the archipelagos of the Azores and Madeira, and in some inland areas of Portugal. Aljezur, for example, is an area where real estate investment will continue as well as some areas in the Douro. Any of these areas can be appealing, and there are plenty of others where you can still invest; all the inland areas of Portugal still allow real estate investment after 2022.
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