Invest in Portugal ? It’s no longer an open secret, Lisbon has become the Eldorado of investors since the liberal measures taken after the subprime mortgage crisis, and then the country became the favourite destination for tourists after the Arab Spring.
If one wishes to settle down, one may have to ask oneself the question. Is it worth investing in this country, especially in the midst of the covid-19 crisis ?
With this post, we would like to highlight the prospects for this year. We have therefore collected a few elements that will help you to imagine that Portugal – and Lisbon in particular – still has potential for your investment & business projects.
Like Forbes magazine in April 2020, we are also convinced, like many others, that Portugal is the destination to live after the covid-19 crisis.
When I was in Paris a few years ago, a friend of mine asked me : « I know a crazy man who wonders if investing in Portugal would be a good idea? – Why not, I answered him from one word to the next. He’s not as crazy as he looks. I’d say he’s more of a visionary… » and I argued my point as follows.
What reasons do we have to believe that Portugal is still a profitable market for property investment ?
1- The demand for real estate is still high and despite the virus, it has not weakened or even increased in certain areas of the country. Lisbon is probably the only capital in Europe that has resisted so well.
2- Portugal is constantly highlighted for its quality of life. The country does not need a big advertising campaign to attract entrepreneurs, students, promoters and investors.
3- Portugal has always tried to save its economy during the covid-19 crisis. The country is limiting the damage and real estate projects have not been delayed.
4- The real estate market is highly dynamic and competitive due to the strong demand.
5- The urban centres of Lisbon & Porto are evolving fast, very fast. The real estate boom is having a snowball effect on the renewal of a whole country. Investor projects can be counted in thousands.
6- Investing massively in Portugal in a « real estate investment and management company » (SIGI) has a significant tax advantage. You are taxed at 10% on your dividends. Investing in stone has always been a good choice, even more so in Portugal !
7- The capital gain on resale is taxed at between 5 and 28% (depending on whether you are a private individual or a company, whether your property is located in a rehabilitation zone, etc.). This remains without any advantage compared to other countries!
7- The climate, lack of insecurity and political stability are a perfect cocktail to attract investment. More than 3 billion euros have been invested in real estate in 2019 !
8- Lastly, Portugal remains and will remain a fashionable destination for tourism. The numerous bankruptcies of hotels and restaurants are a golden opportunity to buy back in this period of crisis.
Do you need valuable advice on how to invest wisely in a property in Portugal ? Contact us via this form and we will put you in touch with a real estate agent you can trust. With our experience in Lisbon for many years, we know the right specialists.
The Portuguese have been emigrating for a long time (at the height of the crisis in 2008, there were 10,000 young graduates per month who went abroad to Angola, Brazil, Norway, Luxembourg, etc.). This index clearly shows how weak the country’s economic dynamism is.
On the contrary, since 2012, 9,389 investors (i.e. a total of 16,050 members of their families) have been granted a permanent residence permit by Portugal. They obtained it by subscribing to the Golden Visa, a residence permit offered in exchange for capital invested in real estate or investment funds (min 350,000 euros).
This political approach, criticised in particular by the EU and the opposition parties because of soaring real estate prices, is set to change. From 1 January 2022, a Golden Visa can only be obtained if you invest in sparsely inhabited areas such as Aljezur (Costa Vicentina), Peneda-Gerês and the Douro valley. In Lisbon or Porto, the Golden Visa will be issued if you invest in offices or shopping centres.
Other tax measures are to be highlighted and are more important.
To cope with austerity and attract mass capital, tax measures have been adopted and have evolved since April 2021: pensioners are taxed at 10%, non-habitual residents are still taxed at a reduced rate. This incentive policy (one can speak of tax dumping) attracts the largest capitals from the old continent and elsewhere.
This, of course, boosts Portuguese banks, the property market and promoters. More generally luxury goods. Therefore, investing in Portugal in luxury (products or services) is a good idea since everything is done by the government to attract this market.
It can be a difficult step to take, it’s true. But it is important to know that, in addition to its usual residents, Lisbon attracted 28 million tourists per year in 2019 (3 times more tourists to Lisbon than residents in Portugal). And we’ll quickly get back to this level when we’re done with covid-19 !
Today, all European airports fly to Lisbon with TAP, Easyjet, Transavia, Ryanair, etc…
Skyscanner shows that Lisbon has enjoyed the highest increase in flight search. My city of heart is constantly gaining places in the UK’s top 50 most sought-after cities in the world.
I had fun interpreting this because it is not only the UK that visits Lisbon but the whole world !
Now that you understand my motivation, think of the beautiful sunny country of Portugal as an investment opportunity. It deserves to be believed in !
For any advice, discussion or an investment-oriented tour in Lisbon, please feel free to contact me.