Golden visa makes prime portuguese property sales shine

The scheme, which gives non-European nationals a five-year residency permit if they purchase real estate worth at least 500,000 euros, is one of several introduced by countries such as Greece and Spain in the last year. Since January 2013, the offer has helped Fine & Country Cascais to sell over 35 million euros worth of property.

The average purchase value is 2.7 million euros, according to Charles Roberts, Managing Partner of the agent, as high net worth individuals particularly respond to the scheme. Indeed, Portugal’s Non-Habitual Residents Scheme ensures that there are considerable tax advantages to buying Portuguese real estate. Combined with the offer a visa, which includes visa-free travel within the Schengen area, it is an ideal opportunity to snap up European property.

Fine & Country have seen such strong demand, they tell OPP Connect, that they have had to develop a new arm of their business just to cope.

“The demand comes predominantly from China – 85% - also from South Africa, Libya, and Lebanon there is a significant amount of interest from the Middle East in countries like Egypt due to the political conditions,” said Mr. Roberts.

“In terms of value we have €35million worth of sales we would not have had if the Golden Visa programme had not been around. We have no reason to believe it will not continue.

“All of the agencies that provide us with clients are from China, so that is likely to grow significantly due to the demand from wealthy Chinese for that type of scheme.”

Indeed, a recent report from Savills highlighted the growing number of Chinese investors in overseas property markets, with China driving activity in Cyprus as well as other countries.

The success of Portugal’s scheme may provide hope to countries such as Spain, where their own residency scheme will be introduced this autumn. Portugal has an advantage over its neighbour, though, adds Roberts:

“We don’t have whole towns built during the construction boom that look like ghost towns. The Chinese will not put up with that. They want to be near lots of people. They want brand new, fully licenced, never been used, out-of-the-packet homes in an area with lots of activity.”

“More than 40 other countries have schemes of some description. The Spanish scheme is not quite as good. It does not have the option of a Spanish passport at the end of five years.”

Excluding demand from the residency scheme, though, notes Roberts, the domestic and international markets in Portugal are “fragile”. Prices are now 30 per cent below 2007 levels. Only at the top end of the market are things surviving, with no reliance upon lending to afford a holiday home.

“We have not had a single property over the last four years to anybody that required finance from the bank,” adds Roberts. “All are cash buyers."