From 1 January 2022, new changes came into force for the Portuguese Golden Visa programme. The changes include limitations on where investment properties can be located and an increased investment threshold for some investment routs.

Changes Regarding Real Estate
Although residential properties located in Lisbon, Oporto and the Algarve will be excluded from the programme, areas such as Alcácer do Sal, Grândola, Santiago do Cacém, the Douro Valley, Aljezur, Peneda-Gerês, and Madeira, still may offer attractive investment potential, and will be some of the key areas that are likely to see growth, especially early 2022. However, the reality is that they are and will always be less liquid than ‘prime’ locations in Lisbon, Porto, or Algarve. It is something investors will need to consider.

That said, the real estate route is divided into the €500,000 minimum investment that requires the acquisition of a property and the €350,000 route which requires the acquisition of a property that is at least 30 years old or located in rehabilitation area and will also have to be refurbished.

If the investment into residential properties is limited to low density areas such as the ones indicated above, the minimum investment has been reduced as of 1 January 2022 by 20%, meaning that the minimum investment of €500,000 reduces to €400,000 and the €350,000 reduces to €280,000. Potential investors are advised to consider these areas carefully and not rush their investment decision. Should the Golden Visa program be changed further down the road, or removed completely, would these areas be able to sustain these prices?

Madeira and the Azores are not considered low density areas, as market dynamics are already at play due to limited supply and increased demand. They are more mature markets which move well without the stimulus of a Golden Visa program. This means the minimum investment amounts remain €500,000 and €350,000.

The restrictions are not applicable to commercial or services properties, such as hotels, where clients can still acquire properties in Lisbon and Oporto. Perhaps this is a more sensible option for those seeking Golden Visa real estate investments where the investment prospect alone is attractive? The investment should always be self-reliant and independent, without the need to include residency rights in order to make it more attractive.

With the above in mind, it is understandable why the growing trend of investing into Golden Visa eligible funds is likely to accelerate. Such funds are not only regulated but offer more diversification and generally better returns than a direct real estate purchase.

Changes to Other Investment Routes
As of 1st January 2022, investment in any one of the non-real estate routes, will be required at the increased levels, as detailed below:

  • Investment by capital transfer will increase from €1,000,000 to €1,500,000; or
  • Investment by capital transfer in research activities, will increase from €350,000 to €500,000; or
  • Investment by capital transfer for the acquisition of units of investment funds or venture capital funds, designated for the capitalisation of companies, will increase from €350,000 to €500,000; or
  • Investment by capital transfer through the establishment of a commercial company with a head office in Portugal, and the creation of a minimum of five permanent jobs, will increase from €350,000, to €500,000.