Residence Permit In Portugal By Purchasing A Property In The Azores
The Azores are an archipelago in the Atlantic Ocean. The islands are 1,500 kilometers from mainland Portugal but are part of the country as an autonomous region.
The archipelago consists of nine volcanic islands. The largest island is San Miguel: it covers an arearnof 744.5 km² and can be traveled from one end of the island to the other in an hour and a half by car. Corvo is the smallest with an arearnof just 17 km².
The flight from Lisbon to Ponta Delgado, the capital of São Miguel Island, takes 2.5 hours
How the Azores attracts tourists and investors
650 000 tourists traveled to the Azores each year before the pandemic – three times the population of the archipelago. The tourist season on the islands lasts from April to October.
The Azores has been voted Europe’s top destination for extreme tourism by the World Travel Awards in 2020. The archipelago was also listed as one of Europe’s 20 best places to live, invest and do business by Forbes magazine and the European Best Destinations portal.
Unique nature. The Azores are famous for endless green pastures, black volcanic sand beaches, beautiful lakes, and coves in the craters of volcanoes.
More than 400 species of plants and animals can be seen only in the Azores, such as the Azores bullfinch. Sea excursions are organized for whale and dolphin watching.
Geothermal springs in the Azores are rich in iron. They vary in temperature from slightly warm to hot. Bathing in the springs is allowed, in most cases for free. There are also spas on the islands, such as the Terra Nostra Botanical Gardens on the island of San Miguel. A day ticket costs only €8.
The active volcano Pico is the highest point in Portugal. It rises 2,351 meters above sea level.
Climate. The Gulf Stream, a warm sea current, passes next to the Azores. The climate is therefore mild and warm, with an average summer temperature of +24°C to +26°C and a winter temperature of +17°C to +19°C.
The ocean temperature ranges from +16°C in winter to +24°C in summer.
The weather on the islands is variable, with frequent fogs and gusty winds. Locals use the SpotAzores mobile app to track the weather in real-time.
Yachting. Orta, on the island of Faial, is a yachting destination for yachtsmen from all over the world. It is home to the largest port and marina in the Azores. Yachtsmen stop in Orta when they cross the Atlantic to replenish supplies and relax. The Azores marina also allows yachtsmen to anchor their boats.
Advantageous tax conditions for businesses. From 1 July 2021, the standard VAT rate in the Azores is 16%. Reduced rates of 4% and 9% also apply.
Comparison of VAT rates in Portuguese regions
Standard rate: for goods and services that are not on the specific lists of the VAT Code
Intermediate rate: for goods and services from Schedule II of the VAT Code. For example, certain foodstuffs and plants
Reduced rate: for goods and services from Schedule I of the VAT Code. For example, essential goods, foodstuffs, and books
Conditions for buying a property under a residence permit in Portugal
90% of investors chose to buy property among the eight programme options in 2021. In order to obtain a Portuguese residence permit, participants in the programme buy properties worth at least €500,000. The property can be residential or commercial. And if the property is over 30 years old and needs renovation, the investment value is reduced to €350,000.
From 1 January 2022, the conditions of the programme will change. Housing purchases will be banned in Lisbon, Porto and coastal resort towns. But the Azores will not be affected: investors will still be able to buy houses and apartments on the islands to participate in the residence permit programme.
The average price per square meter for an apartment in Ponta Delgada is €2,637. This is half as much as in the Portuguese capital, Lisbon, where the average price per square meter is €4,665.
A villa with an ocean view and all amenities in the Azores costs on average between €500,000 and €600,000.
Examples of properties in the Azores to participate in the programme
What investors get for buying property in the Azores
Portuguese residence permit for the whole family. The property in the Azores is suitable for participation in a residence permit programme in Portugal by investment.
Spouse, children up to 26 years old, and parents over 65 years old can participate with the investor.
Holders of Portuguese residence permit cards can live, study, work and conduct business in the country without restrictions. After five years, the investor can apply for citizenship and obtain an EU passport.
Visa-free travel. With a residence permit card in Portugal, you can travel freely to any Schengen country. Staying in the chosen regional state without a visa is allowed for 90 days in a six-month period.
Portuguese nationals have even more visa-free travel options. The country’s passport enables entry to 188 countries, including the Schengen Area, the UK, Japan, Hong Kong, and Singapore. To travel to the USA and Canada, an electronic entry permit is sufficient.
Tax optimization. If an investor spends 183 days a year in Portugal and becomes a tax resident, they will be able to apply for a preferential status – Non-Habitual Resident. The status is granted for 10 years. It exempts the investor from paying taxes on worldwide income and sets a flat tax rate on income from employment and pension payments.
European education. Portuguese schools are open to all nationals and residents. The Manuel de Arriaga School in Orta is the oldest in the Azores but one of the best equipped in Europe. The school has 36 classrooms, seven laboratories, two computer labs, six workshops, a gymnasium, and a 25-meter heated swimming pool.
The best university in the region is the public University of the Azores, Universidade dos Açores (UAC). The tuition fee for the university is €3000, per year.
A liquid asset and a passive income. Property prices in Portugal rise by an average of 7% each year. The Azores often lead the way in price growth among the country’s regions. In 2019, for example, property prices on the islands increased by 4,1% and in the capital Lisbon by 2,7%.
Participants in the residence permit by investment programme have owned the property for a minimum of five years. During this time, they can rent out the property and earn an income of between 3 and 7% per annum. After five years, the property can be sold and the money invested can be repaid at a profit due to an increase in the price of the property.
Up to 7% per annum
We talked about all the benefits of the programme in the article What a cosmopolitan residence permit in Portugal brings.
Immigrant Invest is a licensed agent for Portugal’s residence permit programme by investment. If you want to become a resident of the European Union state through the purchase of real estate, seek advice from experts in investment programmes.