Portugal closes extradition "golden visas"

As Prime Minister Antonio Costa said at a press conference in Lisbon on Thursday after a government meeting, Portugal will “cancel the issuance of new golden visas” to combat real estate speculation.

Foreign property buyers who wish to extend a valid golden visa will only be eligible if their property is being used as their own home, or if the properties are being leased out on a long-term basis, he stressed.

The Golden Visa project in Portugal was developed ten years ago for citizens of countries outside the EU, as part of an effort to revitalize the country’s public finances after it was bailed out by the EU and the International Monetary Fund in 2011. Since then, the country has raised 6.8 billion euros ($7.3 billion), with 90% of that money going to real estate, according to the Portuguese Agency for Immigration and Border Control.

Chinese citizens account for almost half of the 11,628 residence permits issued under the program, which is becoming increasingly popular with US investors. Golden visa applicants are still required to make a real estate investment of at least €350,000 or create at least 10 jobs in Portugal or transfer €1.5 million.

Variations of the project, dubbed the Golden Visa, have been adopted across Europe and in countries around the world, from the US and Canada to Spain and Greece.

In Portugal, some politicians have criticized the program for driving up property prices and making housing unaffordable for many segments of the population. EU representatives note the potential risk of tax evasion and money laundering by foreign buyers.

In November, Prime Minister Antonio Costa already said the government could stop issuing golden visas, saying the program “no longer pays off”. In 2021, his government began restricting permits and shutting down real estate markets in cities like Lisbon, where home prices have more than doubled since 2015 to €3,805 per square meter, according to real estate website Idealista.

Paulo Silva, head of real estate consultant Savills in Portugal, told Bloomberg that golden visas helped attract foreign investors to the country when it was in need of money a decade ago, but today they account for no more than 3% of real estate transactions.

“It’s wrong to blame golden visas for rising property prices, as it’s mostly due to an imbalance between supply and demand,” Silva said. “In the end, investors will just take their money and put it in another country where they can get it.” Golden Visa.

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