During the past ten years Portugal has become a European property hot spot, with investors from around the globe buying up property and driving up prices in Lisbon, Porto and the Algarve. Twenty years ago, the magnificent ancient buildings of the country’s capital were in poor shape and the centre of Lisbon was woefully run-down. Now, with the benefit of massive foreign investment, Lisbon has been transformed into one of the most vibrant and stylish capitals in Europe, to the extent that, based on bookings for 2022, it is the continent’s most popular destination. So many celebrities have acquired property in the Algarve that locals have taken to referring to it, jokingly, as a European California. Foreign interest in Portuguese property has continued unabated, despite the pandemic, though attention is now turning to investment opportunities in the magnificent ancient cities of the country’s interior.
The Golden Visa Scheme
Golden visa schemes exist in a number of European countries, but it was Portugal’s particularly generous version of the scheme which, about ten years ago, set off an avalanche of foreign investment. You can get EU citizenship by investing in Portugal. As it was originally implemented, the scheme allowed foreign purchasers of property in excess of 350,000 euros, to acquire residency rights and freedom of travel within the Schengen area, with the offer of a full Portuguese passport after a mere five years. The scheme has been so successful that there is a real danger that the Portuguese people themselves are being priced out of living in their own capital and so, as of January 2022, the government has now imposed certain restrictions. The investment threshold has been increased to 500,000 euros and qualifying purchases have been restricted to property in the country’s interior. Despite these new constraints, Portuguese property still represents an excellent investment opportunity. You can get a sense of the bargains to be had by browsing the beautiful properties available online.
Thriving rental market
Portugal is a year-round tourist destination and consequently, rental properties are easy to let and provide a very good return. Portugal’s outstanding golf courses, which host tournaments throughout the year, are an additional attraction which draw thousands of visitors. Portugal also has a long tradition of excellent universities and a large student population, many of whom are visitors from abroad, so that rental properties, not in main tourist areas, also offer the opportunity to provide rental accommodation for students.
Low cost of living
Portugal has one of the lowest costs of living in Europe, significantly cheaper than Spain, Italy or France and around 30% lower than that of the U.K. The southern part of the country enjoys 300 days of sunshine a year, so winter heater bills are minimal.
Non habitual tax status
The Portuguese government has worked hard to attract foreign investment and the Non-Habitual Tax Resident status is a further incentive designed to attract investors and professionals of high economic worth, enabling these fortunate individuals to live in the country, tax free, for up to ten years. There are currently 10,000 Non-Habitual Tax Residents living in the country.
