This restriction was already laid down on the Government Budget for 2020, but the pandemic postponed the decision. The Government will now accelerate the process by express instruction of the Prime Minister, as advanced by Negócios this week, quoting an unidentified Government source, thus honouring the agreement with BE (Left Block political party) and PCP (Portuguese Communist Party) for the 2020 Government Budget.
The decree should be ready until the end of the year. With the new changes, foreign citizens who intend to acquire a Residence Permit for Investment Activity (ARI) by acquiring real estate will have to focus on the countryside, instead of the seaside areas, where most of the investment is currently concentrated.
Losses may reach €700M/ year
But this measure will have costs. According to APPII, the end of this program in Lisbon and Porto may represent a loss of 700 million euro per year, which include 85 million in direct taxes for the State.
According to APPII, restricting investment to the countryside using the "Golden Visa" will not guarantee the investors’ interest in those regions, and it «will dictate the end of a large part of the foreign investment in Portugal, which, since 2014 has already represented an investment that reached nearly 25 billion euro».
94% of the visas issued since the start of the program concern real estate investment and 88.6% of that investment concern asset priced at more than 500.000 euro. 97% of that investment was made on coastal areas. APPII now fears that investors will «look for other countries to invest in».
Considering that the Golden Visa is «decisive in terms of investing», Hugo Santos Ferreira, Vice-President at APPII, remarked in a release, that this program «is one of the main boosters of what is currently consensually considered one of the engines of the economy – real estate, which represents 15% of GDP – and which made a decisive contribution for the regeneration and dynamics shown by the main Portuguese cities, benefiting the economy, in particular hotels, restaurants, commerce, etc».