A Presidential Veto: Portuguese Golden Visa Program Lives to Fight Another Day
Mercan Properties
Sponsor
As announced on Monday the 21st, the President of the Republic vetoed the Mais Habitação Program, which includes restructuring the Portuguese ARI or Golden Visa (“GV”) program.
The GV program in Portugal has been entirely successful – remaining the most popular program in the world, and evidence has shown its contribution to the increase in the prices in the residential house market is marginal at best.
Moreover, outside the government, all major political parties, relevant civil society associations, and economic stakeholders in Portugal have been very critical of how the legislative process has been conducted, advocating that the proposed measures, namely the restructuring of the GV Program, lack a solid basis, as they do not reflect a proper understanding of the current situation nor have consistent impact assessments preceded them.
This position and concerns were generally the fundamentals the President of the Republic indicated to veto the law and send it back to Parliament to be amended.
Proposed measures have had negative repercussions even before taking effect, says President
On the one hand, even if the President did not specifically address the GV program when detailing the reasons for the veto, he mentioned that the proposed measures have negatively impacted private investment as of their first announcement and that neither public investments nor the general proposals represented an alternative to the investment private stakeholders ensured in the real estate sector.
On the other hand, the President expressly indicates that, despite his alerts during the process, the first one issued on March 9th, the government radicalized positions in Parliament, leaving itself almost isolated, attacked for its proclamatory style, which was unrealistic and perhaps unconstitutional, and that currently the total absence of a regime agreement or even the slightest consensus between the relevant parties, the law does not present enough credibility to be implemented in the short term.
The President of the Republic concluded his presentation on the motives for the veto, indicating that “I know, and we all know, that an absolute majority in the Parliament can repeat the approval we have just voted for in a matter of weeks. Nonetheless, as everyone will understand, this is not what can or should prevent the expression of a deep conviction and a serene negative analytical judgment.”
In simple terms, and although the current government is allowed to reconfirm the approval of the Mais Habitação Program since it holds more than 50% of parliamentary votes, it would be advisable that the concerns voiced by the President of the Republic be taken under advisement.
The realistic scenario is that the program will end in late September or early October
That being said, a realistic scenario under the current polarized positions is that the government calls upon the first session of Parliament after the summer break – September 15th, as the date to reapprove the bill, after which it is resent to the President for approval and publishing. Even if this date – September 15th is indeed the chosen date, under current processual proceedings, it is doubtful that the bill will come into force before the end of September or, most likely, the beginning of October.
When the new amendments come into force, investment in the GV program will continue to be possible, although at a higher entry price point in all remaining categories across the board. In that sense, we advise all investors to move forward as soon as possible with their investments. The current timelines will allow investors to start and submit their process before restructuring the Golden Visa program.
Finally, it is essential that we make our investors aware that the current average time to conclude the investment, with IAS, is around one week, which – under current timing, provides more than enough time to still invest and participate in the Portuguese investment program.
Therefore, in order to keep both the existing regime and the current price point, investors should move forward with the investment and the application before the estimated deadlines for the new regime.
For more details, contact International Atlantic Services