Portugal: Portugal has put an end to its contentious ‘golden visa’ scheme and introduced a ban on new licences for short-term rentals as part of a €900 million package of measures designed to alleviate the country’s housing crisis.
Ranked as one of Western Europe’s poorest countries, Portugal has seen rents and house prices shoot up in recent years, while its 8.3 per cent inflation rate has also adversely impacted the problem. Last year, more than 50 per cent of workers earned less than €1,000 per month while rents skyrocketed by 37 per cent in 2022 in Lisbon, the capital city.
On top of that, the golden visa scheme, which is also popular in Greece, has proved to be divisive in a country that is heavily dependent on tourism as wealthy foreign investors are able to enter the property market and buy properties to rent out or buy at low prices, restricting the availability of affordable housing.
Prime Minister Antonio Costa said that the crisis was now affecting families, as well as the most vulnerable in Portugal’s society.
Although it is not yet clear when the new measures will be brought in, Costa told a press conference that he expected some to be approved next month and that others required a vote by lawmakers beyond that.
It is believed that a mechanism would be introduced to regulate short-term rent increases, while the government will also offer tax incentives to landlords who convert holiday properties into houses for locals to rent.
New licences for tourism accommodations will be prohibited, unless they are located in less populated rural areas.
To address the housing shortage, Costa said the state would rent vacant houses direct from landlords for a period of five years and put them on the rental market.
Portugal’s ‘golden visa’ programme, which offers EU passports to non-EU nationals in return for investments including in real estate and has been criticised in the past for contributing to soaring house prices and rents, is also being discontinued by the country’s government.
The scheme brought in a reported €6.8 billion in investment since its launch in 2012, with a significant portion of the money being diverted into real estate, which has led to criticism and protests from housing groups around Portugal in recent years.
The groups said that the measures would have little impact if the government continued to promote other policies that attract wealthy foreigners and investors to Portugal, including the ‘digital nomad visa’. Introduced in October, the visa enables overseas citizens to live and work remotely from Portugal without paying local taxes and contributing minimally to the local economy.
Three years ago, then-Lisbon mayor Fernando Medina set out a plan to prioritise affordable housing for hospital staff and other key workers during the pandemic, who he said had been “increasingly forced out” of the city centre due to spiralling rental costs in their neighbourhoods. Although he said that Lisbon had benefitted “enormously” from tourism in recent years, he claimed that a third of the properties in the city centre were being rented out on platforms such as Airbnb.
