Golden Visa Changes: Residential Real Estate

The Portugal Golden Visa has become well known as one of the most popular residency-by-investments schemes in the world, providing non-EU individuals with an entryway into Europe for a qualifying minimum investment, in addition to increased personal and financial freedoms for themselves and their families. 

From 1 January 2022, Portugal’s new changes to its Golden Visa Program come into place, which will boost interest in the interior areas of the country along with the autonomous islands of Madeira and the Azores. 

There is a general sense that these developments will increase investments and developments in these areas of the country, diversifying the investment portfolio to include lesser-known areas that are no less beautiful. 

Portugal Golden Visa real estate investment options:

The following investment routes are available for the Portugal Golden Visa from January 1, 2022. 

• Purchase residential real estate in a designated interior area that is worth at least €500,000 (or €350,000 if investing in a rehabilitation project). If the residential property is located in a designated “low density” area, then a 20% discount will apply.
• Purchase commercial real estate anywhere in the country that is worth at least €500,000 (or €350,000 if investing in a rehabilitation project). If the commercial property is located in a designated “low density” area, then a 20% discount will apply.
• Purchase residential and commercial real estate anywhere in the autonomous islands of Madeira or the Azores, that is worth at least €500,000 (or €350,000 if investing in a rehabilitation project). The entire islands of Madeira and the Azores are classified as high density, so a discount is not applicable when investing in the islands. 

Which areas of Portugal qualify for the Golden Visa?

Following the changes, the Portuguese government is looking to foster investments in the following areas:

• Low-density areas
• Urban requalification
• Cultural heritage
• High environmental and social value activities
• Increasing employment opportunities and productivity

The Portuguese authorities have amended the real estate investment routes to account for this. A new classification system has been created that states which areas investors can invest in. These areas are called “interior” and “low density”. 

Note that these are very different terms, an understanding of each can be found here:

Interior areas

Interior areas are areas where you can make a residential real estate investment to be eligible for the Golden Visa. For commercial real estate, the property needs to be classified as “commercial” and individuals can invest anywhere in the country (i.e. there are no location restrictions in place).

Low-density areas:

Low-density regions are defined as territorial units (NUTS II). These regions have a GDP per capita that is 75% or less than the national average or less than 100 inhabitants per square km. If an area is categorized as “low-density”  then a 20% discount rate will apply to your investment. 

Although interior areas and low-density areas share overlapping ground, it is possible for an area to be both interior and high-density. If this is the case, then you can buy residential property, but no discount will apply. A good example of this is on the autonomous islands of Madiera and the Azores. 

Some properties that remain eligible for the Golden Visa are areas of high growth potential – such as the Douro Valley, Aljezur, and Peneda Gerês, meaning that investors can still find excellent investment opportunities in Portugal. 

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