The Internet is perhaps our world’s greatest source of information… current and outdated… accurate and made-up.
That’s why I don’t consider Google my friend.
Instead, I count on the network of contacts I’ve developed around the world over the past two-and-a-half decades for intelligence when I need it.
When I encounter conflicting information—online or otherwise—I reach out to someone on the ground who can give me the real deal in real time.
That’s what I’ve been doing over the past year to stay up-to-date with changes—current and proposed—to Portugal’s Golden Visa and Non-Habitual Resident (NHR) programs.
Non-Habitual Resident Program Updates
Last year the Portuguese government changed the NHR tax rate to be applied to the pension income of anyone resident in the country from 0% to 10%.
Portugal’s Golden Visa Program Updates
This year they’re increasing the minimum required investment amounts associated with some of the investment options available to qualify for Golden Visa status.
You can become a Golden Visa resident of this country by investing in real estate in qualifying markets. That option will continue… with the same minimum investment amounts.
However, buying property isn’t the only way to get a Golden Visa in Portugal, and the required investment amounts for the non-real estate options are increasing.
In addition to buying qualifying real estate, right now you can deposit 1 million euros in a Portuguese bank before the end of 2021 and then use that investment as the basis for your residency application.
The figure goes up to 1.5 million euros after the end of this year.
If you start a business in Portugal and hire 10 employees, you can, likewise, qualify for residency. Right now you can reduce the number of employees required to qualify if you invest at least 350,000 euros. Next year the required investment amount to be able to start your business with fewer than 10 employees will increase to 500,000 euros.
When Will These Changes Be Effective?
Search online and you’ll see that many websites indicate that the new investment requirements go into effect as of July 1.
My attorney in the country—who has written a comprehensive update outlining changes to both the NHR and the Golden Visa programs featured in the March issue of my Simon Letter advisory service—reports that, in fact, the changes take effect starting Jan. 1, 2022.
How Has The Golden Visa Program Has Affected Portugal?
As João further explains in his overview of the current opportunities and options for becoming a Golden Visa resident in Portugal, the Golden Visa program has had a significant impact on this country’s real estate markets, especially in Lisbon and Porto.
In the early years of the program, developers in those cities renovated buildings and priced apartments in them at 500,000 euros—not coincidentally but definitely conveniently the minimum investment amount required to qualify for Golden Visa status.
An improving economy alongside an expanding pool of foreign buyers competing for limited inventory in the country’s capital soon saw those 500,000 euros buying fewer square meters—that is, smaller apartments.
The government eventually realized that they no longer needed the Golden Visa program to boost property markets in the more populated areas of the country, including and especially Lisbon, and began considering adjustments… which are now playing out.
While the investment amounts for real estate will remain the same as of Jan. 1, 2022, the locations for eligibility are shifting.
As of the first of the New Year 2022, you will no longer be able to qualify for Golden Visa residency by buying a piece of property in Lisbon.
That’s big news… but not the end of the world… or of this program. You’ll simply need to shop for your Portuguese pad elsewhere—in the Algarve, for example.
I remind you often that residency programs come and go and change along the way. When you find one that fits your situation and meets your objectives, act on it. Wait too long, and you could find you no longer qualify or that the opportunity you were interested in is no longer on the table.
Meantime, don’t count on the Internet to help you navigate your options. Information on the Internet remains on the Internet indefinitely… including, sometimes, long past its use-by date… and new information can struggle to make its way to the top of a Google search.
Editor, Offshore Living Letter