On Feb 16, Portugal has announced closing of the Europe’s most popular golden visa program in its current form, to curtail the housing crisis in the country with rising rents and property prices largely effecting local population including students. Airbnb rentals will also be prohibited in densely populated areas. Next, the Government will draft a law and will be voted by lawmakers in the parliament to finally end the golden visa program.
The announcement came on the same time as Ireland closed down its Golden visa for wealthy investors. European Commission in its report, more worried about money laundering, tax evasion and criminals getting access to Schengen area, has increasingly pressured Portugal to halt the ARI scheme granting residence permits for investors by 2025 .
The Portuguese ARI golden visa scheme was launched in 2012 to revive the economy of the country and after running for 11 years it has raised more than 6.5 billion euros mostly invested in property market. Every month on an average 100 residence permits were issued to property investors and their family members.
The Portugal golden visa program had suffered a number of problems such as.
- High investment threshold (above 280k euro).
- Created a divide with wealth inequality
- Suffered a number of scandals and court cases.
- No jobs were created to drive economic growth.
- Frequently Amended regulations created uncertainty with investors.
- Banks subjected to pressure to accept foreign funds (committing more resources on scrutiny of funds)
- Created a housing crisis in the country (with more foreigners buying properties)
- Investors were required to spend one to two weeks in Portugal to keep their permits from expiring.
- Properties were sold at very high prices to foreign investors benefiting only developers.
- Processing times stretched to more than 12 months. Biometric appointments with SEF authorities were a nightmare. (Some even waited for 2 years)
- No automatic citizenship for investors.
- Excludes EU/EEA citizens