In an effort to address the country’s ongoing housing crisis, Portugal has announced the end of its controversial Golden Visa programme for new foreign property buyers. In addition, the country has prohibited new licenses for Airbnb and other short-term vacation rentals.
Housing Crisis in Portugal
Portugal is one of the underprivileged countries in Western Europe, and the housing crisis has been one of the country’s most serious problems.
Due to its Golden Visa, house and rental prices have risen dramatically, with more than half of workers earning less than 1000 euros per month last year. Rent prices in Lisbon alone will increase by 37% in 2022.
Portugal will stop issuing new Golden Visas in order to combat real estate production.
Impact of the Golden Visa Scheme
It is worth mentioning here that Portugal’s Golden Visa programme encouraged wealthy foreigners to invest in the country, making it difficult for locals to rent or buy a home.
Portugal’s 8.3% inflation rate has exacerbated the situation.
To address this, the government will now only allow foreign real estate buyers with Golden Visas to renew their visas if their properties are used as their primary residence or rented out on a long-term basis.
What is the Portugal Golden Visa scheme?
The Portugal Golden Visa is a government-sponsored immigrant investor programme that grants residency to people who invest in properties worth at least 500,000 euros ($532,215) or create 10 jobs in Portugal.
The scheme began in 2012 and has received over 6.8 billion euros ($7.2 billion) in investments from over 20,000 people.
Portugal Digital Nomad Visa
Housing groups argue that the new measures will be ineffective if the government continues to promote other policies aimed at attracting wealthy foreigners, such as the Digital Nomad Visa, which was introduced in October.
This visa enables foreigners with high monthly incomes from remote work to live and work in Portugal without having to pay any local taxes.
According to the new measures do not change the “system in place” in which large real estate investment funds control a significant portion of the market.