Businessmen ask for a step back on golden visas

Professionals are against "unprecedented attack" on foreign investment and leave suggestions to keep the measure.

"Portugal closed itself off to international investment, foreigners are no longer welcome in the country. This is the message that the government sent to the whole world", analyzes the president of the Portuguese Association of Real Estate Promoters and Investors (APPII), Hugo Santos Ferreira.

Criticisms are mounting to the end of the Residence Permit for Investment (ARI) regime, known as golden visas. Associations and businessmen point the finger at the measure announced by the prime minister under the Mais Habitação programme, approved by the Council of Ministers last week and now in public consultation, and ask António Costa to take a step back.

"Either the government will have the good sense to rethink and realize that this is not the way to go, or it will present us with a study that proves that the housing problem is related to the impact of the golden visa", challenges the APPII representative, who calls the set of measures as an "unprecedented attack and punishment on tourist and foreign investment".

António Costa put an end to the ten-year-old mechanism based on the argument of combating real estate speculation, justifying that there is "a very low rate, not to say almost zero, for job creation, and a very low contribution to other activities". A different reading is done by the general manager of Mercan Properties, Miguel Gomes.

The company that is part of the Canadian group Mercan entered Portugal in 2015 and has developed its business exclusively through ARI. By the end of the year, global investment in the country, which includes 23 hotels, will reach 1.4 billion euros through 2,500 golden visas

"It was precisely this program that allowed the Mercan group to create, in recent years, in Portugal, a reference hotel group, which employs hundreds of workers and will come to employ thousands of workers when all hotel units are completed and put into operation. , which will generate important economic activity in a fundamental sector", he defends. The official considers the measure "more ideological than logical" and that, moving forward, will lead to "the loss of a very significant source of foreign investment, which the country is so lacking in, and in particular the tourism sector". Miguel Gomes hopes, therefore, that the government "reconsiders the decision". The president of the Portuguese Association of Resorts (APR) is peremptory in stating that "foreigners are not to blame for anything because they represent a tiny slice of the real estate market and that slice has no capacity to influence either prices or demand", and warns of the economic impacts that could come from the end of the program and the "harmful turbulence" that the announcement came to bring.

"Gold visas have given Portugal, since 2012, close to seven billion euros in investment [6.54 billion euros and 11,180 authorizations granted]. the construction and gave employment to many people. This could end from one day to the next and there is no replacement for this program", regrets Pedro Fontainhas.

The APR spokesman maintains that clarifications are necessary because what the head of government dictated was "a sea of ​​doubts". At stake is not just real estate investment, but all the other ways that the ARI contemplates, namely investment through the transfer of capital, job creation or support for artistic production and cultural heritage, for example.

António Costa only clarified that, in addition to the end of the granting of new visas, the authorizations already granted will be renewed only if they are to be used for the owner's own and permanent home or that of a descendant, or if the property is placed on a long-term lease term.

Restructuring is the way

The ban is not seen with good eyes either by businessmen in the sector or by associations. The strategy should go through a reorganization of the program, they argue. "The end of the golden visas removes the country's competitive advantage. Instead of the end, there should be a bet on the scrutiny, in order to understand what kind of visas interest us. There are regions that benefit from this, businessmen who allocate investment in industrial zones and agricultural and who wanted to create new businesses and wealth in those regions", explains the CEO of Avenue Real Estate, Aniceto Viegas, who points out that the measures applied today were already channeling investment towards the interior.The amendment to the ARI regime, which came into force in 2022, prohibited investment in housing in Lisbon, Porto and on the coast, and it is only possible to carry it out inland and on the islands. The tourist or commercial bet was, in this way, the only chance for foreigners to be able to invest in the big cities through this program. or the Pine Cliffs Resort, in the Algarve, points out solutions to a new version of the program and suggests the complete withdrawal of the housing component. "Maintaining services, capital deposits, investment in funds and contributions to research programs. This could continue to be the purpose for attracting new capital to Portugal, without impacting housing", he suggests.

Daniel Correia stresses, even so, that the blame attributed by the government to gold visas for real estate speculation "is not real" because it has "a very small expression". "What is causing housing prices to rise is the lack of construction. During the last 10 years we have had construction levels well below the 2008 crisis and that is noticeable in the market. If there is no construction, the supply law and of demand dictates that prices have to rise", he points out.

Hugo Santos Ferreira, from APPI, agrees and recalls that of the 168,000 houses sold in the country, in 2022, only 1,000 properties were sold through golden visas, and blames Costa. "We are not able to build houses that the Portuguese can afford, because we do not work on the supply side, we do not have a courageous government that takes measures to be able to lower the cost of housing. We have to lower the tax burden, we cannot have the Additional Tax Municipality on Real Estate (AIMI) on housing land, nor VAT on construction at 23%", he indicates.

The leader believes that the ARI "has the maturity to evolve, never to end" and argues that the government should make foreigners part of the solution and not the problem. "Including the golden visas in the housing program was one of the solutions. The investors of the golden visas are willing to help the country, they like us and want to have their children in our universities", he attests.

Taking advantage of golden visas to attract innovation through, for example, modular construction, which is faster and cheaper, is another of the ways indicated by Hugo Santos Ferreira.The president of APPI suggests two more ways to reformulate the program, either through the creation of a social visa, which defines the obligation of foreigners to contribute to Social Security, or through a green visa, "in order to combat poverty energy of the country's buildings, forcing investors to buy buildings with high energy certifications".

Source news: www.dinheirovivo.pt