(Photo: Liam McKay on Unsplash)
Portugal is enticing real estate investors with its intoxicating combination of historic charm, unspoiled nature, uncrowded beaches, and low-cost lifestyle. It offers state-of-the-art public health systems and excellent higher education institutions and is one of Europe's safest and most economically stable countries. In an attractive amalgam, Portugal is one of the most developed nations in the world yet retains the untamed natural beauty of 850 kilometers of beaches.
Those seeking Portugal's year-round mild climate are pleased to discover another reason Portugal stands out as an investment destination: The Portuguese Residency Program by Investment, more commonly called the Golden Visa. The country's leading business experts, including real estate developer Luis Horta e Costa, applaud the government's decision to launch this program in 2012, as it has significantly invigorated the real estate market.
Golden Visa applicants can gain a toehold in the country through investment in a Portuguese investment fund. Still, those who choose the real-estate route discover significant returns through rental income and capital appreciation.
This residential route to a visa is more tempting than versions in other countries because of its low cost and massive benefits. Investors are not required to take up permanent residency in the country to qualify for citizenship or pass a Portuguese language proficiency test. Real estate investors and their dependents can gain access to citizenship in as few as five years without relocating; they must simply stay in Portugal for just seven days a year on average.
Luis Horta e Costa's Favorite Beach Town and New Visa Rules
Since the debut of the Golden Visa, foreign investors have infused Portugal's already-sizzling real estate market with more than €8 billion. Investors seeking second homes fall head over heels for the country's picturesque towns, historic Unesco sites, friendly population, and sparsely populated beaches. With their rugged coastlines, the Algarve and Alejento regions are beloved by natives like Luis Horta e Costa, who favors the pastoral hamlet of Melides.
"I have been in Melides for 25 years," Luis Horta e Costa. "Now, Melides is a fantastic place, and everybody wants to go there."
Melides still qualifies for the Portugal Golden Visa, which underwent changes on Jan. 1, 2022. New rules disallow foreigners from investing in residential properties in certain hotspots, including Lisbon and Porto, and certain coastal towns, like Setúbal and the Silver Coast. Since the real estate investments in those popular areas have mushroomed, the government seeks to spread financing to Portugal's interior and low-density regions. (Luckily for those who prefer their beaches rustic, Portugal added the islands of Madeira and Azores to the areas open to investments.)
The new rules set a slightly higher entry point for real estate investors. If investing in a rehabilitation project in designated interior areas, the minimum amount is €350,000 (the price point was €280,000 previously). Investment requirements for new structures begin at €500,000. Properties located in low-density areas receive a 20 percent discount.
The Golden Visa's Opportunities
Citizens of the world who seek a better future for themselves and their families find that the Portuguese passport consistently ranks among the most travel friendly. When approved to participate in the residency permit program, investors immediately gain free usage of Portugal's public hospitals and access to European universities and job markets.
With a Golden Visa, investors and their family members can travel, work, live and study in the 26 European Union countries that form the Schengen Region, to which Portugal belongs. It's the perfect solution for investors seeking new opportunities ranging from retirement to higher education for their dependents.
The Boom Continues and Luis Horta e Costa Welcomes New Architecture
Whether it's modern beach houses, boutique hotels, or renovated fishing cottages, housing runs the gamut in Portugal's landscape of tasteful real estate options. The country's growing architectural sophistication has also generated a growing list of luxury home projects, including villas framed in teak and glass. Internationally known designers Christian Louboutin, Philippe Starck, and Jacques Grange are among those influencing local architecture by erecting stunning holiday homes in Portugal.
As a real estate developer, Luis Horta e Costa understands the value of creating residential homes or commercial projects that attract buyers with their originality. Homebuyers get a giddy feeling when presented with stylish new architecture against Portugal's panorama of Old-World beauty.
As Luis Horta e Costa says, "We have to build what people don't know that they want, but as soon as they see it, they love it."
Since few countries incentivize foreigners to purchase property to the high degree Portugal does, the real estate boom continues. A whopping 14 percent of homes sold in February 2022 did so in less than a week, according to an Idealista report. Since property demand remains steady, only one question remains: When are you joining Portugal's real estate boom?
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