Portugal’s president says “nao mais!” to its version of EB-5

The “golden visas” program has attracted 4.5 billion euros to the country’s property market

Feb.February 01, 2020 09:00 AM
Porto, Portugal (Credit: Pixabay, iStock)

Porto, Portugal (Credit: Pixabay, iStock)

Portugal’s government wants to end its “golden visas” program in Lisbon and Porto that’s attracted billions of euros in investment to those cities.

The program offers visas to foreign investors who spend 500,000 euros on property, similar to the United States’ oft-criticized EB-5 visa program. It was put in place in 2012 and has attracted 4.5 billion euros in investment to the country since then, but Portuguese President Antonio Costa says it’s done its job in those cities, according to Bloomberg.

The visas “should contribute to the recovery of the property market where it’s necessary or in areas of low population density,” he said on Wednesday. “Fortunately, it’s no longer necessary in big urban centers.”

The program will remain in place elsewhere in the country, but Lisbon and Porto account for more than half the purchases made by foreign participants. Investors who have obtained golden visas will retain them.

Critics of the program contend the influx of foreign capital has created imbalance in housing markets and rent growth that causes widespread displacement. Property prices increased 10.3 percent in the year ending in the third quarter of 2019, second only to Luxembourg among western European countries.

Proponents argue that ending the program will incentivize investors to invest in other countries with similar programs.

Portugal’s Socialist party also wants to institute a 10 percent flat tax on the pensions of foreign residents who apply for the country’s non-habitual resident program. They previously paid no tax on their pensions. Some European countries considered that unfair.

Portugal’s parliament will vote on the country’s 2020 budget in early February. [Bloomberg] — Dennis Lynch

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