Associations jump to defend Golden Visa programme

The Portuguese government’s announcement that it would restrict authorisation for residency through property investment has come under a barrage of criticism from local business associations.

The current ruling PS Socialist party is currently trying to push through parliament a restriction on Golden Visas investors in property stipulating that they can no longer get the residency permit on the strength on property investment in Lisbon and Porto.
The Portuguese Association of Estate Agents and Real Estate Professionals (APEMIP) has slammed the initiative as “counterproductive” which will only serve to put the brakes on market demand instead of encouraging developers and investors to increase the amount of housing offer to sell to potential Golden Visa investors.
The President of the APEMIP, Luís Lima argues that it “sends out a negative signal to the real estate market and to potential investors” who will likely now look for alternative and more attractive programmes elsewhere such as Cyprus and Malta.
The association says that instead of ruling out allowing overseas investors to buy property under the scheme for €500,000 in Lisbon and Porto, where most investors want to purchase property, they could increase the investment limit to €1,000,000 for these cities.
The Portuguese Association of Real Estate Developers and Investors (APPII) through its spokesman Hugo Santos Ferreira points out that there “is already a positive discrimination for investment made for investment outside urban areas, such as the case where a discount on the asking price is offered but which the majority of investors were not tempted by the discount because they preferred to buy in Lisbon, Porto and the Algarve and along coast in general.
For the APPII this goes to show that the measures proposed by the Government which will still need to be voted on in parliament will only “make investors look to other countries and overseas investment attraction programmes.”
But the hue and cry from associations has been joined by criticism from opinion makers in the English press too.
Charles Roberts, who runs the Fine & Country string of luxury estate agencies in Lisbon, Cascais and Estoril says the proposal before parliament to restrict Golden Visas is “misguided and not well thought out.”
He says that most applicants are not money launderers but rather wealthy persons in their home country which has become economically, politically or religiously unstable and is therefore looking for Plan B for himself and his family in the event that things go wrong at home.
In an opinion piece published in the Algarve Resident this week, Roberts argues that it is a “gross mistake to believe that the applicant as fallen in love with Portugal and, as a result, is applying for the Golden Visa here.”
This love affair with Portugal, he says, may develop later but, at the outset, the applicant is simply looking at various alternatives for the Golden Visa in terms of country and benefits.
Portugal is but one of a myriad of countries offering a Golden Visa scheme and, therefore, Portugal is in effect in competition with other countries to attract applicants. By negatively restricting the applicant’s choice, it is Portugal as a whole that loses.
According to SEF, there have been 7,700 Golden Visa applications in Portugal through the purchase of a property at €500,000 or above. “This is a minimal number of transactions in relation to the global real estate market in Portugal and it would be nonsense to say that this has warped the real estate market” says Roberts who argues that it is perfectly natural that the applicant wants to buy a property in an area where he may expect some capital growth and also has the possibility of earning an income from rental of around 3% per annum.
He would also be looking for a rental tenant that can offer the relevant guarantees that the rent will be paid during the duration of the tenancy agreement.
These factors are bound to attract the applicant primarily to Lisbon and Porto, as these two cities have rental demand from mid to high ranking executives working for international companies for medium-term contracts and whereby the employer can give the required guarantees to the landlord (applicant). This simply would not be the case in secondary cities in Portugal.
“If the government thinks that the applicant will willingly be diverted to other areas of Portugal, it is wrong. The effect will be that the applicant will choose a different country altogether for his Golden Visa,” says Charles Roberts.