The Proposal to Close the Golden Visa is Unconstitutional And Will Not Solve Portugal’s Housing Crisis
Patricia Casaburi
Lisbon
On March 30th, Prime Minister António Costa, who has been serving Portugal for over eight years and has benefited from the debt-free investment and revitalization of the country, announced his final version of the legislative proposal to terminate the Portuguese Golden Visa. The read now is that the program has served its purpose and, to alleviate property price speculation in Lisbon and Porto, investors are no longer welcome.
This is somewhat ironic, given that residential property purchases in Lisbon and Porto – alongside other hotspot locations – no longer qualify for the Portugal Golden Visa. Despite this, property prices have increased by over six percent year on year, a clear indication that Golden Visa investments were not a significant contributor to price increases in the first place. Alongside this, the government is only considering real estate investments under the program, while private equity and venture capital funds have become a significant part of the Golden Visa program since 2020.
The government is also overlooking the indirect benefits of the Golden Visa program. For example, when commenting on the limited employment opportunities created via Golden Visa investments, the government conveniently considers only direct job creation. It should be made clear that this sector creates thousands of jobs in construction, tourism, commercial real estate, legal, financial, and other sectors, generating millions of investments in low-density areas of Portugal.
Golden Visa investors are often vilified, yet French and EU funds remain the biggest buyers of real estate in Portugal. When it comes to rental markets, without presenting a judgment but merely a statement of fact, the new visa programs to welcome expats, such as digital nomads, certainly apply more pressure to the property market, as, by nature, transient immigrants can afford higher rental agreements.
Candidates under the Golden Visa program generally have a strong love of Portugal. They aim to understand the culture and learn the language, and actively participate in communities, even from afar, with the goal of someday living in the country – if they have not already come to call Portugal home.
The government’s proposal to pass new legislation with retroactive application and negating the terms of residence renewals, such as not recognizing the warranties of minimum stay requirements, is a dangerous path for any European politician or legislator to follow.
It is important to note that investors must submit a declaration whereby they commit to holding the investment for at least five years. This obligation results from the law, and all the investors are required to sign a declaration under oath for this purpose, and this good faith principle must be upheld by both the State and the residency candidate.
Laws restricting rights, freedoms, and guarantees must be of a general and abstract nature. They cannot have a retroactive effect or reduce the scope of the essential content of constitutional precepts under Article 18.3. Legal Force of the Constitução da República Portuguesa.
Yesterday, April 4th, one of the founding fathers of the Portuguese Constitution, Prof. Dr. Jorge Miranda, shared his legal opinion in the Jornal de Noticias that the State has a duty of ‘good faith’ and the People have the right to ‘guardianship of legal trust’ and to have their legitimate expectations of the law safeguarded. Dr. Miranda adds that this proposal also fails to account for ‘vacatio legis’, which is a grace period between the publishing of a new law and its coming into effect.
The Golden Visa is a life project for the candidates and a costly one, with investments between €250,000 and €500,000, and government fees of nearly €6,000 per person, as opposed to just under €100 for any other residency visa. All applicants undergoing the process have the legitimate right to demand compensation from the State, which can include insurmountable amounts.
The Portugal Golden Visa has been a great success in revitalizing the economy, and a significant contributor to Portugal’s recovery from the 2008 financial crisis. The termination or any amendment to the program should be done with transparency in mind and with careful consideration and consultation with all stakeholders.
Patricia Casaburi has an LLB from the University of Law, in London and her specialties include legal lead liaison in commercial law and immigration. With an added bonus of a bachelor degree in media studies and journalism, she built expert sales and operations teams, with knowledge of the best communication practices.
As a Brazilian national, with Italian and Lebanese grandparents Patricia knew from an early age what it meant to be global. Patricia worked in London in account management for an international group before founding Global Citizen Solutions.
Patricia speaks Portuguese and English and has a good understanding of Spanish and French.