ASMIP president calls for Golden Visa rethink

The President of the Portuguese Association of Real Estate Agents has slammed the Government’s decision to end the concession of Golden Visas in Lisbon, Porto and the coastal areas and Algarve as “destroying one of the property market’s main drivers.”

In an interview with Diarioimobiliário, Francisco Bacelar of ASMIP says that one of the challenges for this year will be a rethink on the Golden Visa programme without excluding the investment in the interior of the country that the changes to the scheme hope to achieve.
He said that in his experience of over four decades in the real estate market, in which he has seen various crises, he believed that Portugal’s property sector would escape the worst ravages of the economic crisis thanks to the maturity it has achieved in recent years. “It’s like trying to stop a runaway train at speed, you can put the brakes on to slow it, but it won’t be enough to put it into reverse,” he said, adding that hope was all important, since pessimism would be the biggest obstacle.
Bacelar said that one of the first challenges for the sector was the drastic changes to Portugal’s highly successful Golden Visa programme which had proved to be one of the main drivers for the property sector in Portugal.
“Of course investment should be redirected to the interior of the country, but we fear that within the current context, the interior will not be attractive enough to capture overseas investment because of lower demand and the lower value of property and lower return as a consequence,” he said, pointing to the “residual interest” in investing in the interior since that investment option had already existed.
“I get the Government’s intentions, and even understand the need to attract investment to the interior, but a mixed solution could have been chosen, with greater tax benefits for those choosing to invest in the interior, and without scraping the main and most popular option (in Lisbon and Porto) which generated more than €5Bn of investment in the national market,” he said.
Furthermore, he pointed out the end of the grace periods or so-called moratoria whereby scores of companies would no longer see their loans and the interest paid on those loans frozen, and which would lead to an inherent uncertainty and the incapacity of many companies and families to support those burdens within the difficult economic and employment context.
“This will be a difficult period and we need to be prepared for this dangerous impact and reduce its ill effects as much as possible,” said Bacelar.
The ASMIP president said that the EU ‘bazooka’ was “positive” but stressed it was also important that the funds should be “wisely distributed and applied” which would be decisive to soften the impact of the coming fallout from the end of the moratoria.
As for the measures that should be taken in 2021, he said that rethinking the decision taken on the Golden Visas was vital since the pandemic had shifted the goal posts, and it no longer made sense to change the regime now.
He said it was vital to slash taxes on new build residential housing projects for the middle class (construction materials and manpower costs in Portugal have risen in recent years making it an unattractive and unprofitable option for many real estate developers to meet the demand in this market).
Bacelar pointed out that boosting this sector through lower tax incentives would “satisfy the evident demand in the market for middle class homes and would contribute towards job creation.”
The ASMIP president also said that with Europe’s eyes on Portugal because of its six-month presidency of the EU, there was a golden opportunity for Portugal’s real estate sector to promote Portugal as a unique location within the context of the European real estate market.
“If we don’t make the most of it, then other countries will. Portugal will lose out and we will all lose,” he concluded.