Foreign investors have reportedly already started ‘pulling out of Portugal’ in wake of controversial changes to the golden visa residency regime.
TSF radio reports today that Chinese and Brazilian nationals have cancelled property deals they were pursuing since parliament has approved ruling PS proposals to limit the emission of golden visas to areas of the Interior and the autonomous regions of Azores and Madeira (click here).
The cancelled deals were all in territories now removed from the regime: those of Greater Lisbon and Porto.
Hugo Santos Ferreira, vice-president of the Portuguese association of property promoters and investors (APPII) has described a “torrent” of calls from overseas in the last week – particularly on Wednesday when the changes were voted through.
The only chink of light for the property sector is the fact that the budget still awaits ‘promulgation’ by President Marcelo Rebelo de Sousa.
This suggests a great deal of lobbying will be going on in the background.
Said Santos Ferreira: “On the day of the announcement many promissory purchase and sales contracts, and indeed some final deeds, were not completed due to uncertainty”.
These deals are now on hold as the market waits to see “confirmation” of the changes in the State Budget.
The APPII vice-president said he himself had received a phone call from ‘an investor in Shanghai” on the night parliament approved the new measures. “He was analysing a major acquisition in Lisbon – aimed at property promotion for the middle-class and focused on the golden visa. He decided in the end not to go ahead”.
According to Santos Ferreira, the notion that the golden visa scheme will be able to attract wealthy foreigners to Portugal’s interior from one minute to the next is “impossible”.
He told TSF. “If this was a Portuguese national investing in China or Brazil, he would be unlikely to invest in an interior that he did not know, preferring principal cities with recognised prospects of economic ‘return’, low on risk”.
Of the 8,125 golden visas attributed since the regime’s inception in 2012, Chinese nationals are the largest group of beneficiaries (responsible for 4,441 visas); Brazilians are the second largest, albeit with the much smaller tally of 841 visas.
Whether APPII’s concerns can force any changes in these ‘final hours’ is what many in the property sector will be watching.
President Marcelo is due to promulgate the 2020 State Budget towards the end of this month.