The Complex Portugal Golden Visa Property Investment Rules, Explained Once and For All

Thomas K. Running
Entrepreneur

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A defining characteristic of the Portuguese Golden Visa (ARI) program is that it’s essentially designed by politicians in several iterations, not by investment migration industry consultants. That has resulted in a popular but unsurprisingly complex program.

The property investment option is a great example of this. It was already quite complicated, with four different investment levels based on age and exact location of the property within a municipality, the GDP, and the population density of the region where it was located. Two similar properties about a stone’s throw away from each other could require either a €280,000 or €500,000 investment.

While experts still doubt that the Golden Visa program had a major impact on the affordability of housing in Portuguese cities, it was a convenient scapegoat. Who better to blame than “rich foreigners” buying up properties at inflated prices?

So the politicians did what they do best, they added more rules.

How Golden Visa eligibility is determined in 2022 and beyond

Unlike most other Golden Visa investment categories, the required investment levels remained unchanged. The big change, however, was that all of a sudden, residential property investments were limited to a list of “interior” municipalities and parishes published by the government, as well as the islands of the Azores and Madeira.

In other areas, such as Lisbon and Porto and many more, you can now only invest in commercial properties, such as hotels and retail. Adding to the confusion, the list of “interior” areas includes plenty of coastal areas, and plenty of the “non-interior” areas are far inland. You can see why I put “interior” in quotation marks.

So say you’re looking to invest in a residential property for your family to use as a holiday home. For each property, you find your verification process would look something like this:

• Check if the desired property is even eligible for residential Golden Visa investment
  • Figure out which municipality the property is located in
  • Look up the PDF listing all the eligible municipalities and look for it there
  • If it’s one of the “mixed” municipalities (meaning parts of it are eligible and parts of it are not), you’ll have to figure out the actual parish that the property is located in and look for the parish in the same PDF
• Once eligibility is confirmed, figure out if the minimum investment is either €500,000, €400,000, €350,000, or €280,000
  • First, you’ll need to figure out which NUTS III statistical region the property is located in (I’ll get to what this means below)
  • Then look up the region’s GDP (to check if it’s lower than 75% of the national average) and population density (to see if it’s less than 100 per km²) on the Portuguese statistics website PORDATA to see if the property qualifies for the 20% reduction in investment amount (meaning either €400,000 or €280,000)
  • Second, you’ll need to figure out the age of the property or whether it’s located in a so-called urban regeneration area (ARU) to see if it qualifies for the 30% rehabilitation discount in case you’re keen on modernizing an older property

It’s not an easy process, and quite prone to errors! Especially if you’re not set on a specific location but have a larger search radius this process quickly gets tedious. If you’re an advisor helping several clients looking for properties, it’s even worse.

Over the past year, we’ve seen countless confused investors and a surprising number of advisors that can’t make sense of the rules.

In early 2022 we saw many maps of Portugal published, ostensibly trying to help both investors and advisors figure out what rules and investment minimums applied where. The only problem was that all the maps suffered from one of two issues: Either they contained glaring mistakes (misclassifying several municipalities or even large regions), or they didn’t contain enough detail to be useful. The latter especially in the “mixed municipalities” where some parishes are eligible and some aren’t.

So we put together our own map:

While the white lines you see are the municipality borders, we also took the time to hand-draw the “interior” and “non-interior” areas within the mixed municipalities.

Note that which areas qualify as low density or not can change from year to year as local GDP and population density shift. So always make sure you look at a map based on the latest data!

Finding eligible properties, the easy way

While the map above is accurate (for 2022), it’s not great for figuring out the rules that apply to the exact municipality or parish you’re looking at investing in. Especially if it’s located close to the “border areas”!

That’s why we decided to build a tool that makes this whole process painless. Not only that, we’ve made it freely available for anyone to use.

You just input any Portuguese address, or name of a city, town, parish, or landmark, and the tool returns all the rules and thresholds applicable to that specific location. It’ll even explain why a location is classified as low or high density, interior or non-interior, with links to the relevant data sources so you can verify for yourself that the data is correct.

It’ll even link you to the relevant municipality website, where you’ll find maps of the so-called urban regeneration areas (ARUs) where the investment amount can be lowered by 30% for refurbishment projects.

Try it yourself here:

The case of Resende and Viseu

The tool has already helped investors find good areas to invest in that they otherwise wouldn’t have known are possible, an example being the parish of Resende in the Viseu district.

Let’s first take a step back. As briefly mentioned above, the relevant regulations for the Golden Visa are applied either on the parish, municipality, or NUTS III level.

Confusingly, the areas defined on the NUTS III level don’t necessarily correspond to Portugal’s districts, which are used for many official purposes and colloquial purposes.

In this case, the investor had found a €280,000 residential property he liked in Resende, which is located in Viseu in Northern Portugal. When consulting the map showing areas where residential Golden Visa investments are eligible, he noticed that the area surrounding Viseu was excluded and hence concluded that his chosen property in Resende would be excluded as well.

However, Resende is, in fact, located in the district of Viseu, not the municipality of the same name. Without intimate knowledge of the geography of Portugal, you’d be excused for not being able to tell the difference between the district or municipality when looking at a relatively low-resolution Golden Visa map.

As you can see by using our search, the whole municipality of Resende is considered interior (as listed in Diário da República), and the relevant NUTS III region (Tâmega e Sousa) is classified as low-density due to its low GDP per capita. This means residential investments at the €280,000 and €400,000 levels are possible.

To further make sure that the property is located in an ARU, you just click the link to cross-check the location with the maps provided on the municipality website.

Feel free to give the tool a try to save yourself from both manual checking and potential errors.