Golden visa scheme

How to get residency in Portugal via real estate

The best thing about being a foreigner buying in Portugal is that you can take advantage of of two separate schemes set up to attract foreign investment, the 'golden visa' scheme and the Non-Habitual Resident (NHR) tax programme. It gives you higher chances to get residency in Portugal, that is quite faster than in other European countries. Unlike France for example, where you need to live for at least 5 years before you can apply for residency.

When you think about investment in overseas real estate it's worth while analysing all risks you will bear: yearly property taxes, house management costs, opportunities this property can provide you with and options to stay in country in accordance with law. Portugal is fairly one of the best options at the moment. Let's explain why.

  1. Property prices are reasonable and you can buy an appartment at EUR 120 000 in Lisbon. (Editor's note: price per square meter is EUR ~2 222, unlike Germany where it's almost EUR ~5 000 in big cities).
  2. Property taxes (when you buy a property) are EUR ~2 500 if the property price is EUR 120 000 (IMT as property tax transfer - EUR 1 445 94, Stamp duty tax - EUR 948, IMI - EUR 50 94). Editor's note: when you buy a primary residence, you will be exempt from the IMI for the first 3 years, and in case you property price is less than EUR 92 407 you won't pay IMT. Read more details about property taxes.
  3. Capital gain tax is only 28% for non-residents when you sell your property, while in France it's 40,5%. Editor's note: for both cases there are exclusions, but still.

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The golden visa scheme

The golden visa scheme allows non-EU citizens to secure residency by investing EUR 500 000 in property, or EUR 350 000 if they buy property for redevelopment within an urban renewal zone. There are other ways to access the scheme, for instance by starting a business that employs more than ten people, or investing in Portuguese smaller companies, but the property route is the one most often taken. Many purchasers under this scheme have headed to Cascais or Lisbon, but Porto and the Algarve could also be attractive ports of call.

The scheme gives residency for one year, renewable twice for two years. That will take you through to the five-year point at which you're eligible to apply for permanent residency; wait another year and you can apply for naturalisation as a Portuguese citizen, if you want. (Note that Portugal allows dual nationality.)

You can apply on your own if you want, but most applicants use a lawyer or specialist to help them through the application process. Unless you really enjoy doing paperwork, that's probably the best route. So far, the greatest proportion of applicants have come from China, Brazil and South Africa, with a good sprinkling of Russians, but the scheme might also apply to Brits who move to Portugal after Brexit.

The NHR scheme

The NHR scheme is quite separate from the Golden Visa, and gives foreign nationals who are moving to Portugal a ten year tax break. Any income that comes from outside Portugal, and that is taxable by the country from which you receive it, is received free of Portugese tax. So, for instance, if you retire to Portugal, your UK pension and savings income will be free of tax for 10 years. If you decide to work in Portugal, you might also get a break - depending on your profession; singers and musicians, dentists, IT experts, and archaeologists are some of those who benefit from a 20% flat tax on their income under the scheme.

However, if you want to use this scheme, you must not have been a Portuguese tax resident in the last five years. That means you'll need to get your NHR application filed fairly quickly once you move, to avoid getting sucked into the Portuguese tax system.

All in all, buying property in Portugal can be a relatively quick and painless affair for most foreign purchasers - and the extra advantages make it well worth your while if you're looking to move to Portugal permanently.