12 May 2022
Ultimate Guide to Real Estate Purchasing for Portugal’s Golden Visa
More popularly known as Portugal’s Golden Visa program, Portugal’s Residency-by-Investment (RBI) scheme offers non-EU Nationals a way to obtain Portuguese residency, with the right to live and work in Portugal, and the right to move freely through the EU.
There are several investment options offered for the Golden Visa, including capital investment, investment in social or infrastructure projects, and opening a business. However, the most popular route is through purchasing Real Estate.
Advantages of Real Estate investment in Portugal
Compared to other countries in Europe, Portugal’s Real Estate is still affordable. The property market has been on an upward trajectory since 2008.
Historically, the most popular areas for residential Real Estate purchases for Portugal’s Golden Visa have been coastal areas such as The Algarve and The Silver Coast. However, as of 2021, and due to the new Golden Visa locality restrictions, it is no longer possible to purchase residential properties in these and some other popular areas. This doesn’t mean you can’t find your dream home in Portugal! There are many charming areas throughout Portugal and the Portuguese islands of Madeira and the Azores, where you can still purchase residential real estate under the Golden Visa scheme.
Potentially valuable real estate is available in low density interior areas. These areas are rural, with smaller towns and cities and many historical and cultural sights. They boast hot to mild climates, incredible scenery, cultural charms, wines and gastronomic delights, and old villages – all the things that define Portugal and Portugal’s rich history.
You may not be able to purchase anywhere in Portugal, but once you have obtained your residency visa, you will be able to live anywhere you like in Portugal. You can rent out the residential property you purchased for the Golden Visa, and there’s nothing to stop you from renting in the Algarve or any of the other ‘restricted localities’.
Where Golden Visa applicants can purchase Residential Properties
1. High-Density areas – the autonomous islands of the Azores and Madeira. Minimum Investment – EU500 000.
The Azores: An archipelago of nine islands in the North Atlantic. The accessible interiors of these volcanic islands are mostly rural – the main industries being farming, fishing, and tourism. The climate is mild subtropical. Properties in the Azores range from inland farmsteads to coastal villas and apartments. Ideal for a holiday home that you can rent out if you don’t want to live there full time.
The islands of the Azores offer stunning scenery to be enjoyed on many hikes and walks. There are plenty of adventure activities on offer – for locals and tourists alike. It’s also an ideal location for pleasure boating and sport fishing, with several small boat marinas dotted around the islands.
Madeira: Voted the ‘World’s Leading Island Destination’ by The World Travel Awards from 2015 to 2018. Madeira is wild, rugged, and beautiful. It’s also delightful and it’s ‘always summer’ in a year-round sunny climate. Homes in this tourism hotspot offer incredible ocean views and excellent rental opportunities. Live a laid-back life here, or go for a more jet-set lifestyle – both can be found in abundance on Madeira.
2. Low Density – inland regions in Portugal’s mainland. Minimum Investment – EU500 000 less 20% discount lowering the investment to EU400 000.
The Douro Valley: Described as ‘magical’ and ‘enchanting, the Douro Valley is not only a charming wine-growing area; it is a massive World Heritage site stretching from the Western side of Portugal, just inland from Porto, to the Spanish border in the East, along the path of the Douro River that traverses Portugal.
The hilly and often breathtakingly beautiful landscape is characterized by steep slopes adorned with terraced vineyards – all growing the grapes used for Portugal’s iconic Port wines
Properties range from small vineyard farms called ‘quintas,’ to luxury villas and estates. The many small towns and villages offer well-priced centuries-old homes to modern apartments.
Peneda Gerês: Situated in the top Northern part of Portugal, Peneda Gerês offers magnificent mountain scenery, much of it protected as part of the Peneda National Park. The area is known for small villages that, for the most part, still look the same as they did in the 13th century.
Modern clifftop villas abound – offering unequaled views of a dramatic landscape. Village properties offer a chance to live in a historical museum piece.
Life is a little slower here – an ideal region to wile the days drinking in the fresh mountain air while enjoying ‘old world’ Portugal.
Alentejo: Yet another region that boasts of a slower pace of life and the ‘real Portugal’, Alentejo encompasses the southwest region of Portugal, below the Algarve. This region includes coastal areas, but Real Estate investment is presently limited to the properties in the interior. Enjoy miles of open vistas, plains, and farmlands. Properties here range from farms to villas to historical homes or modern apartments in the towns.
Rehabilitation Real Estate
Portugal offers the chance of purchasing approved rehabilitation projects – including properties. This lowers the minimum investment amount even further – to EU350 000 for properties over 30 years old, and as low as EU280 000 for properties in a low-density area.
Some important points on the Real Estate locality restrictions
Locality restrictions currently apply to residential Real Estate only; they do not apply to Commercial Real Estate.
Commercial Real Estate includes hotel and resort projects and serviced apartments for third-party rental. You can still purchase these kinds of commercial properties in high-density areas – both in the coastal and interior parts of Portugal and in the autonomous island territories of Madeira and the Azores.
Not all interior areas are low density, but most are – low density being defined as less than 100 people per square kilometer.Not all high-density areas are off-limits for residential Real Estate purchases. You can still purchase both residential and commercial property at the full minimum investment amount in Madeira and in the Azores. This applies to all areas of the islands – interior and coastal.
Purchasing in a low-density area, with the 20% discount, presents a rare opportunity to purchase a 2nd home in one of Portugal’s ‘hidden gem’ towns and areas. These areas offer both quality of life, a taste of the ‘real Portugal’, and a potentially very lucrative return on investment.
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