After a long crisis, the Portuguese economy is finally on the rise and looking better than ever. An increase in tourism and a growth in foreign investment in companies, as well as real estate, have taken a significant role in Portugal´s financial stability.
Portugal was nominated the third safest country to live by the Global Peace Index in 2017 and, Lisbon and Porto placed in the top ten of best destinations worldwide as safe(r) places to visit, affordable way of living, and cultural and architectural richness, suddenly increased the demand in the tourism section and the need to provide the right supply.
Additionally, the warm and sunny climate, numerous well-known restaurants and white sandy beaches combined with rich culture and history, have helped to create a vibe of excitement in the country and make investment opportunities more appealing.
Indeed, tourism plays a significant role in the Portuguese economy and Portugal has become an attractive destination worldwide by several renowned identities. However, Portugal was not prepared to supply the high demand for new constructions, which was the primary reason that encouraged many investors to acquire real estate to meet this growing request for tourist accommodation.
With the tourism sector’s sudden growth, since 2012, not only hotels have increased their bookings but also short rental companies like Airbnb were fully booked throughout the whole year. This made properties seem very appealing in investment terms. Residents started to convert their residential property into short-term rental apartments when they discover they were having a low taxation on their short rentals and the high-income rental was substantially appealing for an additional source of income.
All of this combined has put Portugal on the map for investors, and people from the most diverse countries in the World have found great investment opportunities. Mostly, you guessed it, on properties.
And here is where the real estate boom came in. A more favourable economic environment and the good performance of tourism took the real estate sector into a remarkable recovery.
Residency Programs for Foreign Investors
On the other hand, while Portugal´s property market offers good returns for investors, new Residency Programs and Investment Benefits Schemes launched by the Portuguese Government for non-residents have appeared in the picture. Since 2012, the Golden Visa Program together with the “Non-Habitual” Resident Scheme have been the determining factors in the real estate sector and helped recover the Portuguese economy.
While investors from countries such as France look to Portugal to take advantage of the tax benefits the government offers to foreign investors, nationals from China, the USA, Saudi Arabia and most middle eastern countries are looking for Portuguese residency programs, and consequently, gain access to the rest of Europe and free trade.
The Golden Visa Program for instance helps to further boost the volume of foreign capital investment in the real estate market, while also enabling the renovation of city centres to make them more attractive.
An important thing to retain is that the Golden Visa Program was not only launched to bring foreign investment to the country but also to help renovate city centres.
Candidates for the Golden Visa Program and Non-habitual Residents Scheme usually look for rehabilitated apartments in historical neighbourhoods. In this area, not only investors can generate an income of around 8 to 12 per cent a year through a daily rental basis, but this also has helped to bring new life to historic and rich parts of town.
Reasons why Portugal is so attractive to foreign investment:
– A cheaper way of living
– Solid Real Estate Sector
– Part of the European Union
– Banks loan access
– Safe place to live
– Growing economy
– Diverse touristic offer
– Tax benefits (from €280k)
– Excellent communication infrastructures
– The sunny weather
The fact is, Portugal is not just a dream travel destination but also a dream investment too, either in business ventures or real estate. It all depends on the capital you have available.
As it is, the real estate market is still on the rise, with Lisbon going through a deep landscape makeover. To invest now is to take advantage of all the benefits, whether you are looking for a luxury permanent residency, a holiday home, or a profitable rental property investment.
Here, at Gabi Miguel Lda we monitor closely these events so we can better advise those who seek us. We can help you provide all the legal information needed, tax consultancy and investment guidance.
If you think we can help you in any way, please contact us for more information.