The Golden Visa programme and the current housing crisis in Portugal are two separate topics that should be discussed SEPARATELY.
The Golden Visa programme is likely to end soon. As stated from the beginning, it was intended as a temporary measure to raise capital for the country’s economic recovery from 2008–2013.
I know it’s rather late to pen such ideas, but in my opinion, the Golden Visa should continue. This is because the country still lags behind other Western European countries in many ways. Our public debt exceeds 120% of our GDP. Our health and education systems are both in a crisis; with underpaid doctors and teachers frequently going on strike. Same goes to our public infrastructure. Limited access to public services makes Portugal a challenging place to live if you cannot afford private healthcare insurance, private education at top international schools, or your own car.
As discussed previously too, the Government did try to offer more different options for investors to obtain their Golden Visas; however, no matter how grand the vision was, there were no substantial initiatives that allow such options to be made into reality. The whole legal framework for the Golden Visa (except for property purchases) was extremely vague and it is utterly difficult for an investor to navigate the process. Given these factors, any other GV options pose a higher investment risk than a simple real estate acquisition.
In the realm of Real Estate, the government could have done more to enable investors to make impact investments. Such investments would not only benefit the investors, but also have a positive impact on Portuguese society.
- Only properties with Class A/Green in the energy certification can be sold to GV investors (And all rehabilitation schemes should also meet certain environmental/green standards)
- All buildings included in the GV scheme should have a low carbon footprint
- Public-private partnership initiatives that create more build-to-rent (BTR) developments with controlled rents, making them affordable for the general public of Portugal.
- For new constructions, developers should be required by law to prioritize locally sourced materials and construction to boost the local economy, and provide opportunities for emerging Portuguese designers. The use of sustainable materials should also be a top priority
- Creation of government bonds that improve infrastructure, rural tourism in the interiors. The current law encouraging rural/interior investment is nonsensical. This is an excellent initiative in theory, but in practice is almost unrealistic.
- Create structures like PPP, or Government bonds offering alternative asset classes like SENIOR LIVING, EDUCATION & MEDICAL SECTOR
- A tax incentive should be given to developers who are co-developing the above mentioned projects. This can bring the prices down which in turn can create a more sustainable economy.
The government should combat all the fraudulent transactions and scrutinize each real estate transaction more closely.
- No inflated price properties — Check records and require all proper valuation reports
- Overpriced developments and any sort of immigration products that exploit the Portuguese Real Estate
There is a lot more the Government could do to fine tune the whole legal framework for the GV regime; and abruptly ending the programme now cannot and will not solve the country’s issues. However, it is important that the Government is not just laying out a barebone framework without the details on how to execute the law in practice. Otherwise, nothing is going to be feasible and we will continue to allow many malpractices flourish.
