How to obtain Portugal Golden Visa by investment in real estate

The Portugal Golden Visa is a residence permit by investment. You can also come across terms like Portugal investment visa or Portuguese property visa — they all apply to the same program.

Investors choose one of seven options. Usually, they prefer making safe investments that may make a profit and are easy to return after five years of residency.

Obtaining Portugal Golden Visa by property investment is the most popular option among investors. Since 2021, 94% of applicants have preferred to buy Portuguese real estate over other ways to invest.

Rental properties can be a good form of passive income. In addition, the property can be sold after five years.

Investors can purchase residential properties in the Portuguese inland territories, the Azores and Madeira or commercial properties in any country region.

Discover the benefits of the Portugal Golden Visa and a unique way to EU citizenship

Visa-free travel to the Schengen countries. Portuguese residence permit holders can spend up to 90 in 180 in any Schengen country without a visa.

Moving to Portugal to enjoy life near the Atlantic Ocean. The ocean plays an important role in the Portuguese lifestyle and culture. It attracts water sports enthusiasts from all over the world. Most popular cities are situated on the coast.

Those who prefer a warm climate enjoy it in Portugal. On average, the country gets 300 sunny days per year.

Prices there are lower than in other developed countries of Europe. According to the Expat Insider 2021 survey, 87% of expats find the locals welcoming to foreigners.

Family-friendly country. Portugal is an enjoyable place to live with a family because of its safe environment, relaxed lifestyle, gorgeous scenery and mild climate.

According to a study by CIA Landlord insurance company, Lisbon ranked second of the world’s best cities to raise children.

Alejandro, 42

Director of a financial fund

Moving to Portugal for safety and kids’ education

Alejandro’s house was robbed twice during one year, so he decided to move to a safer place with his family. He chose to purchase real estate in Portugal to obtain a residence permit.

Immigrant Invest helped him to find an apartment, accompanied the purchase deal and assisted during the permit obtainment process. Now, Alejandro’s family lives in a safe country. His daughters attend a private kindergarten and an international school, and in future, they can enter prestigious universities in Europe, the UK, and the USA.

Learn a case

Tax optimisation. The income tax rate in Portugal reaches 48%. However, new residents have the right to get the status of a Non-habitual Resident and switch to a special tax regime.

The NHR status allows paying the income tax at a flat reduced rate of 20% during the first ten years of tax residency. Also, income earned in other countries is not taxed in Portugal.

Companies pay corporate tax at 21%, but a reduced rate of 17% is available for small and medium-sized businesses.

Prospects of obtaining EU citizenship. Investors can apply for Portugal citizenship after five years as a resident.

Holders of the Portuguese passport can move to any EU country and travel visa-free to 188 countries worldwide, including the United States, Canada, the UK and Australia.

Investors do not have to renounce their original citizenship, depending on the laws of their home country.

Portugal Golden Visa requirements for an investor. The Golden Visa is available to any foreigner who can prove the legality of their income and has no criminal record. The full list of requirements includes:

• age over 18;

• proven legal income and no debts in Portugal;

• no criminal records;

• valid health insurance;

• investments must be transferred from another country.

Residency for close relatives. Along with the investor, their family members can be included in the application and obtain residency as well. The list of relatives who can get a Portugal Golden Visa includes:

• the spouse;

• children under 18;

• children from 18 to 26 who are financially dependent on the investor and live with them;

• parents of the investor or their spouse.

Applicants don’t have to pass Portuguese language proficiency tests or history exams. In addition, they are not required to spend all the time in Portugal: as long as they stay for seven days a year in the country, they can maintain their residency.

To participate in the investment program, you can buy residential real estate in:

• the Azores;

• Madeira;

• inland regions of mainland Portugal.

Law changes. Since 2022, residential properties purchased in Lisbon, Porto and coastal areas, including the “Silver Coast”, no longer qualify for a Golden Visa. The complete list of interior regions is published in Ordinance no. 208/2017.

The changes affected the most popular real estate. For example, to obtain a Golden Visa, an investor can no longer purchase apartments in Cascais or Setúbal or Faro that are valued by both locals and tourists as great beach resorts.

Examples of properties in Portugal

Portugal, Cascais

€645,000 — €675,000

Apartments in a 5-star resort complex managed by Sheraton

80 m² — 103 m²

1

1

Portugal, Albufeira

€1,400,000 — €4,500,000

Apartments and villas in a luxury resort managed by Marriott International

194 m² — 386 m²

3

3

Portugal, Lisbon

€860,000 — €2,500,000

Apartments in a hotel managed by Hyatt

88 m² — 251 m²

3

3

Cosmopolitans can still invest in commercial real estate in any region of the country, including Lisbon, Porto and resort cities. To participate in the Golden Visa program, you can buy new real estate or an object that needs renovation.

Those who buy commercial property prefer apartments in hotel complexes. For example, one can buy a share in a new hotel complex in the Algarve, a popular tourist destination in Portugal, or premises for a restaurant or shop in Porto.

The number of sales in Portuguese resorts increased by 70% in 2021, according to Confidencial Imobiliário. Around 400 deals were completed during the previous year.

The profitability of buying a property to rent in Portugal varies from 5 to 15% in the high season.

Examples of commercial properties in Portugal

Portugal, Porto

€365,000 — €565,000

Service apartments and commercial premises in a project near the ocean

40 m² — 209 m²

1

1

Portugal, Lisbon

€830,000+

Commercial space in a residential project with guaranteed rental income

311 m²

Portugal, Santarem

€625,000+

Two commercial premises with a lease agreement for 5 years

501 m²

Investing in commercial real estates like hotels or restaurants is best when the investor wants a property in a high-traffic area. Also, with a commercial property, you’re most likely to be free from maintenance costs and inconveniences. Generally, the management of commercial property deals with that.

Another benefit of investing in commercial real estate is that it’s very likely to start bringing profit right away. For example, when buying a reconstructed hotel, you will be offered guaranteed profitability of 7—10% from hotel management.

The drawback of this option is that the investor can’t come and stay on their property whenever they want — even if it’s a room in a hotel. They can agree with the hotel management to stay there for one or two weeks per year, but that is not guaranteed.

When investing in residential property, the owner can choose to keep it for themselves and not rent it out. In that case, they will be able to come and stay there whenever they want.

If the investor decides to rent the property out, they can start getting profit from their investment right away. According to Numbeo, the average rental price in Portugal is €645 per month for a one-bedroom apartment.

Residential property means that the owner has to deal with maintenance and utility payments themselves.

Another con of choosing a residential property is that the investor cannot buy real estate in areas like Lisbon or Porto. They have to pick between the options in Madeira, Azores and low-density inland areas further away from the sea.

The minimum cost of the property. To obtain a residence permit in Portugal in exchange for a real estate purchase, the investor chooses one of two options:

• from €500,000 — both new and resale real estate that doesn’t require renovation;

• from €350,000 —an object is older than 30 years and needs renovation.

If a house or apartment is located in low-density regions of Portugal, the minimum investment amount is reduced by 20%:

• properties in need of renovation will cost €280,000+;

• other properties will cost €400,000.

The low-density region is the one with less than 100 people per km².

An investor can buy multiple properties under one option: for example, when all properties require renovation.

Additional expenses. An investor pays property transfer tax and stamp duty.

The tax rate depends on the amount of the transaction and the property location.

The property is tax-free if it:

• is located on the mainland and costs less than €92,407;

• is in the Azores and Madeira and costs less than €115.509.

The Property Transfer Tax (IMT) is the most significant expense when buying real estate in Portugal. Its rate is revised annually. The tax depends on the housing cost, type and location.

Other costs include stamp duty, ownership registration, real estate agent commission, and transfer utility bills to another name.

There are also some maintenance expenses. Utility costs, for example, prices for water and gas, vary by region. An investor needs to sign an agreement with the utility service.

The investor is not required by law to have home insurance, but it can protect them from financial loss. The average cost of insurance is about €200 to €400.

Property maintenance in Portugal is cheaper than in other European countries. For example, it costs about €3,000 per year to maintain a one-bedroom apartment in Lisbon.

Real estate owners have to pay annual property tax (IMI) that ranges from 0,3% for an urban property to 0,8% for a rural property.

In addition to taxes, the owner pays utilities, such as electricity, water supply, and garbage disposal. On average, these costs amount to €50 per month in the country.

There is no central heating in Portugal, so each owner decides on this issue. The costs for heating depend on the chosen method and on the season. For villas, for example, monthly maintenance costs in the winter months can exceed €1,000.

Real estate insurance is not obligatory in Portugal if the owner does not get a mortgage. Standard annual insurance costs are from €180 to €380.

Property prices in the country are steadily rising, even during a pandemic. Portugal ranked 12th in the Eurostat list of top EU countries with a high price dynamic.

House prices increased by 13,8% in Portugal in 2021. Investors began to buy real estate in small towns more often.

Lisbon and Porto are the most expensive places to buy a house. At the same time, the value of commercial properties in these cities increased by 20% in 2021.

According to Numbeo, in September 2022, Portugal’s average price per square metre of housing was €2,483. In Lisbon, it was around €4,057; in Porto — €2,657.

Almost one quarter, 22%, of all real estate in Portugal is rented out. Porto and the Algarve remain the most expensive rental markets. The average monthly rent for a one-bedroom apartment in the city centre is nearly €1,000 in Lisbon. In the Algarve, the average price is about €900.

According to Instituto Nacional de Estadística, the average value of the rent of houses rose by 1,9% in 2021. Rents are also expected to increase by 0,4% in 2022.

Portugal is divided into seven major regions. Only five are located in the continental part: the Northern, Central and Lisbon regions, Alentejo and the Algarve. There are two more in the archipelagos — the autonomous regions of Madeira and the Azores. Regions vary in climate, population density and real estate prices.

70% of Portugal’s population lives on the west coast. The south coast, fully occupied by the Algarve, is a popular summer destination for locals and international tourists.

Participants in the Portugal Golden Visa program can buy a residential property in the Azores and Madeira or the country’s interior regions, excluding Lisbon and Porto.

At the same time, an investor can still buy commercial real estate in any region.

The Lisbon region on the west coast is the most populated. The cost of real estate in the capital is two times higher than the national average, but liquidity is also high: prices are growing by 7—10% per year.

The Northern region is home to the second-largest Portuguese city of Porto, one of the country’s commercial centres. The most prestigious universities, such as The Catholic University of Portugal and the Polytechnic Institute, are situated here. This region takes up the northern part of the west coast.

The Central region provides a serene lifestyle, so families with children often move here. Real estate here is 2.5 times cheaper than in Lisbon.

The Algarve region is a tourist centre on the south coast of Portugal. The most popular cities are Lagos and Albufeira.

Property by the sea requires more expenses. Monthly maintenance costs for villas can exceed €1,000.

The Alentejo region occupies a third of the area of Portugal, but only 7% of the population lives in it. Since the population density is low, here you can buy a house with a large plot. It is more difficult to do in the country’s north due to dense buildings.

The Madeira archipelago includes only two inhabited islands — Madeira and Porto Santo. The largest city in Madeira is Funchal.

The Azores are an archipelago of nine islands of volcanic origin. There is an active volcano on the island of Pico. Most local people live on the island of Sao Miguel.

Immigrant Invest is an international company specialising in citizenship and residence by investment. We have our own Real Estate Department, which cooperates directly with European developers. We check the clean title to the real estate and fully accompany the conclusion of a transaction to purchase real estate.

To apply for Golden Visa by real estate investment, the applicant needs to provide the following package of documents:

• passports of the investor and their family members included in the application;

• evidence of entry and legal stay in the country, for example, a visa and an entry stamp;

• medical insurance certificate;

• application for a criminal history check by the Foreigners and Borders Service of Portugal;

• certificate of no criminal record in the country of citizenship;

• certificate of no debt from the tax and customs services;

• contract for the sale of real estate;

• a certificate confirming the transfer of money under a contract for the sale of real estate;

• birth certificates of children, if any;

• marriage certificate.

The complete list of papers may differ depending on the situation. Immigrant Invest lawyers provide investors with a list tailored for them and help them to gather and prepare the documents.