Portugal’s 'golden visa' programme has just had its best month ever as the October figures are released by the Confederation of Construction and Real Estate.
The influx of more than €126 million was registered in the month from non-EU residents investing in businesses or in property purchased for €500,000 or more.
A spokesman said that the Confederation was "very supportive" of the programme aimed at attracting foreign investment, adding that of the €126 million invested in October, €108.3 million of it, or 86%, was for the purchase of real estate.
From the beginning of the ‘golden visa’ programme in 2013, "external investment in Portugal already has exceeded €1.076 billion," according to the Confederation, of this amount, €972 million, or 90%, has been for the purchase of real estate.
The Chinese lead the list of foreigners receiving the golden tax free key to Europe, followed by Russians, Brazilians, Angolans and South Africans.
Deputy PM Paulo Portas’ golden visa programme certainly is helping to shift some higher-end properties but the appeal may not be due to the inherent allure of property in Portugal, but more to do unrestricted travel within the Schengen zone and with having no obligation to pay tax on foreign earnings for five years.
Many foreign investors have been buying properties in prime Lisbon locations simply to rent them out, similarly in resorts in the Algarve, so owners then are free to travel within Europe and set up shop wherever their business interest lead them while living tax free courtesy of Portugal.
The scheme is helping owners of hard to shift properties and their estate agents but the result is an abundance of expensive properties available to rent, a host of wealthy foreigners resident but not actually present in the country, no income tax charged on their foreign earnings and a negligible benefit to the exchequer beyond the initial property purchase tax receipts.
The President’s oft’ quoted mantra that taxes should be 'fair and the same for everyone' fails to recognise that the golden visa scheme give unfair advantage to wealthy foreigners while the rest of Portugal's taxpaying public picks up the tab for the capital and interest payments on the Troika loans.
