Portugal’s government is to review its ‘golden visa’ programme which grants residence to non-EU foreign investors with a view to redirecting such investment from a red-hot property market in big cities to depopulated areas in order to create new jobs.
The Portuguese Government has admitted that it could review its policy on its Golden Visa programme because it has contributed towards artificially driving up house prices in Lisbon and Porto.
Nearly 8,000 non-EU foreign investors have gained residency under the programme since 2012 in exchange for stakes of between 250,000 and 500,000 euros in various sectors. However, 90% of the 4.8 billion euros invested in total has gone into property, contributing to rising housing costs in the two main cities, Lisbon and Porto. The actual number of jobs created through the scheme has been negligible.
Under the scheme, applicants have various investment options. However, by far the most popular options are acquiring property worth at least 500,000 euros, or, if it is over 30 years old, 350,000 euros so as to encourage urban regeneration.
The government wants to review the programme with the intention of spreading investment across the country. The reviews will not completely exclude property investment but would require the properties to be purchased in other parts of the country where the pressure on house prices is not so high.
The aim is to channel the money from the scheme towards low density regions and activities leading to job creation and regeneration of urban areas and cultural heritage.
The majority of the 7,960 investors participating in the programme so far are from China that aren’t interested in investing in anything beyond houses.
“It is doubtful that Chinese investors would consider other options”, said Victoria Li, who has spent the past five years working for Chinese companies coordinating real estate investments in Portugal for Chinese residence-seekers in Europe.
Chinese investment through the golden visa programme dropped 11% in the first nine months of 2019, in line with a slowdown in foreign direct investment from China across Europe. In contrast, investment from Brazilians rose by 46.5%.
Source: REUTERS, ESSENTIAL BUSINESS,
