Success of Portuguese Golden Visa responsible for overheated property market

Portugal’s overheating property prices may result in changes to its Golden Visa deals.

In a recent announcement, Portugal’s minister of the economy confirmed the likelihood of cutbacks to its popular Golden Visa programme as it’s thought to be the reason behind the country’s overheating property prices. Pedro Siza Vieira told the media the government are looking to alter the popular investment/residency visa’s rules in order to slow the rate of excessive property investment. Porto and Lisbon house prices as the worst affected, with local people and many expats now unable to afford homes.

Although it’s not yet confirmed, the Golden Visa scheme is unlikely to be cancelled entirely but it may well be restricted to those willing to buy properties in regions with a low population density, normally found in the country’s interior. The scheme was first introduced in 2012, at which time Portugal’s real estate sector was at an all-time low. The lure for would-be expats of fast-track residency and an EU member state passport has resulted in some 4.8 billion euros being paid into the economy, with investors from Russia, China, South Africa, Turkey and Brazil the main takers for the visa.

As with many other countries’ Golden Visa programmes, Portugal’s version has come under fire as it basically open the door to Europe for expatriates with the right amount of cash, no matter how the money was obtained. One example emerged just last week, when media outlets reported a Chinese national whose fake gold scam had defrauded many investors before he entered Europe via Portugal and is now untraceable.

Although no firm decisions have yet been made as regards the programme, it’s thought the visas’ 500,000 euro requirement for property purchase may be reduced if all other requirements are satisfactory. However, these advanced warnings are expected to spur Portuguese realtors to encourage their clients to spend, spend, spend, under the threat of future restrictions.