Buying Property in Portugal for Citizenship

Portugal Golden Visa October 2023 Update

The Portugal Golden Visa Program has implemented notable adjustments as of October 2023. Under the newly enacted law, the program has ceased accepting real estate options and capital transfers as valid investment choices. Simply put, it is no longer possible to invest in property to secure residency or citizenship in Portugal under the Portugal Golden Visa. Despite this, several alternative investment options remain eligible for the Portugal Golden Visa program.

An excellent alternative to the real estate pathway, which is no longer available, is the Portuguese Golden Visa investment fund option.

In this article, we’ll delve into some of the residency visa options in Portugal whereby you can secure residency. After five years of legal residence in the country, you can then apply for a permanent residence permit or citizenship, provided you meet all the requirements under Portuguese nationality law.

Residency Options in Portugal

If you visit Portugal, you’ll quickly see the perks of living in this stunning country in Western Europe. Whether it’s the relaxed pace of life that catches your eye, the rich history, the endless sunny days, the proximity to incredible beaches that offer views of the Atlantic Ocean, or the high quality of life, there are many reasons to consider picking up sticks and moving here.

Below, we have outlined some residency options for those seriously considering making the move. As we’ve mentioned, after five years of legal residency, you can apply to acquire Portuguese citizenship, provided you meet all the criteria under Portuguese law.

Buy property and get a D7 Visa

If you are looking to buy a property in Portugal to permanently relocate and eventually get Portugal citizenship, then it’s probably best to opt for a D7 Visa. With this option, after five years of residence, Portuguese citizenship can be applied for, providing that you have lived in Portugal for the majority of this time.

These types of visas must be applied for in your home country at the Portuguese Consulate, where you will get a temporary visa. Following this, you will then have an appointment with SEF in Portugal (the Portuguese Immigration Foreigners and Border Service) to get the D7 Visa. Buying real estate will give you a registered address, which is a requirement to apply for the D7 Visa. 

However, you can also rent a property and supply this address as your registered address for this visa type. This is a good option if you want to have a base to then find the perfect property to buy in a neighborhood or part of the country that suits your needs. 

After five years, you can gain permanent residency and apply for Portuguese citizenship. Note that to secure permanent residency or citizenship, you will need to meet the requirements under Portuguese law. 

The Portugal Golden Visa

There are various investment programs in Europe that entitle non-EU citizens to residency and, ultimately, European citizenship. Most of these programs involve making an investment in the economy, with different investment options on the table. In Portugal, the Portugal Golden Visa program is a residency by investment program in which most individuals can invest in the country in return for residency. The Portuguese Golden Visa investment program has become one of the most popular investment programs of its kind since its inception in 2012. 

Due to the changes implemented by the Portuguese government you can no longer buy property in Portugal and get citizenship or residency. It is not possible to obtain Portuguese citizenship by investment, however, you can obtain residency by investment and eventually apply for Portuguese citizenship through alternative investment routes. Investing in the Portuguese Golden Visa program, bestows a residency permit. Holding the Portuguese Golden Visa for a duration of five years makes you eligible to pursue Portuguese citizenship.

The Portugal Golden Visa program has gained immense popularity and attention partly due to the attractiveness of Portugal’s real estate market and in part because of the flexible stay requirements during the residency period. Since the program began back in 2012, over €7bn in funds has been invested for the Portugal Golden Visa, making it one of the most popular investment programs of its kind since its inception. 

As we have mentioned, it is no longer possible to purchase real estate in Portugal and apply for the Portuguese Golden Visa. This is following the changes to the Portuguese Golden Visa program that were introduced on 7 October 2023. There remain other investment options open to investors. 

If you are looking to apply for Portuguese citizenship in the future but are not ready to commit to five years living in Portugal, then the flexibility of the Portugal Golden Visa may still be the best option for you, and there are several investment options that remain on the table, from investment funds to national cultural heritage. 

• Invest at least €500,000 in a qualified investment fund subscription. The investment funds option has become increasingly popular with American investors in recent years.
• Support the arts or the restoration of national heritage with a donation of no less than €250,000. If the project is located in a low-density area, then there is a 20 percent discount. This is the minimum investment amount to be eligible for the program.
• Contribute a minimum investment of €500,000 to national scientific research in the field of Science or Technology.
• Generate and sustain ten job positions within the specified time frame.
• Establish a new company or reinforce the share capital of an existing Portuguese company with a €500,000 investment, along with the creation of five jobs or the maintenance of ten jobs, including at least five permanent positions.

As we mentioned, Portuguese citizenship can be attained after five years after making your qualifying investment. You don’t need to live in Portugal during the five-year period before you can apply for citizenship; you need only to spend an average of 14 days every two years in Portugal. While real estate investments are no longer eligible, there remain lucrative investment options for investors. 

Make sure to seek the help of trusted professionals before making any investments that you want to be counted towards a Portugal Golden Visa since this will minimize the risk of your Portuguese Golden Visa application getting rejected. For example, they will ensure you meet the qualifying investment criteria and provide you with information on the required documents that you will need to present. 

D3 Visa (HQA Visa)

The D3 Visa (Highly Qualified Activity (HQA) Visa) was launched in 2019 and is essentially a hybrid visa that requires two core components: Portuguese business formation and an investment in high-value research and development activities. This visa type is ideal for entrepreneurs and startup founders who are looking to start seeding a future business in Western Europe, in addition to existing business owners who are looking to expand their operations or are targeting the European market. 

D8 Visa (Digital Nomad Visa)

The Digital Nomad (D8) Visa program in Portugal has revolutionized the landscape for remote workers seeking a vibrant yet serene lifestyle. This innovative visa, introduced in 2021, has drawn global attention for its flexibility and inclusivity, allowing individuals to live and work in Portugal without the necessity of a local employer.
With a burgeoning digital infrastructure and a welcoming expat community, Portugal has become a magnet for professionals in various fields, from tech to creative industries. Provided you earn four times the Portuguese minimum salary and work for a non-Portugeuse employer, you can be eligible for the program.

D2 Visa

The Portugal D2 Visa serves as an entry point for entrepreneurs to gain legal residency in Portugal, catering to those aiming to initiate a new business venture or acquire an existing one within the country. Unlike visas such as Portugal’s Golden Visa or the D7 Passive Income Visa, the Portugal D2 Visa distinguishes itself by not mandating a significant investment or a consistent passive income.

For more information on residency options, you can consult our article: How to Get Portuguese Residency?

Benefits of Obtaining Portuguese Citizenship

Whichever residency option you choose, after five years, you will be eligible to apply for a permanent residence permit and citizenship in the country. The benefits of obtaining Portuguese citizenship and holding a Portuguese passport include visa free access to 174 countries and increased personal and financial freedoms. As the Portuguese passport is a European Union passport, you will be able to live, work, and study in any of the European Union (EU) and Schengen member countries.

The Portuguese citizenship requirements, along with having been a legal resident for five years, include having a clean criminal record and demonstrating that you speak Portuguese to a certain level by passing a Portuguese language proficiency test. After fulfilling these Portuguese citizenship requirements, you can apply for citizenship.

Portuguese nationals have access to an array of benefits, from improved visa free travel freedoms to the right to vote in the country. Portugal also offers dual citizenship. As a Portuguese citizen, you can obtain Portuguese nationality and will not have to relinquish your previous nationality of your home country. Your citizenship status will be maintained in both your own country and Portugal, provided both allow dual citizenship.

Our residency and citizenship division, Global Citizen Solutions, has recently launched its pioneering Quality of Life Index, part of its innovative Global Passport Index, to uncover the true value of a passport that goes beyond the right to travel visa free. This Quality of Living Index factors in the cost of living, alongside the Sustainable Development Goals, levels of freedom, happiness levels, migrant acceptance, and environmental performance, and highlights the benefits of being part of Portuguese society, in which Portugal is a very desirable country in which to live. The Portugal passport ranks in the 13th position.

Who can apply for the Portugal Visas?

Nationalities

All non-EU nationalities are eligible to apply for Portugal visas, including US citizens and British citizens. 

Family eligibility

Under the repatriation scheme, family members can be included in visa applications, such as dependent children, and receive a Portuguese residence permit. 

Portugal Golden Visa: Timeline to Obtain Portuguese Citizenship

Even though it is no longer possible to invest in real estate, Portugal’s Golden Visa investment program is an excellent way to secure Portugal residency, particularly given its short-stay requirements. Here is the timeline for the Portuguese Golden Visa application process. 

1. Paperwork Organisation

First, collect the paperwork for yourself and any dependents you’ll be including in the Portugal Golden Visa application. 

2. NIF and Portuguese bank account.

In order to obtain the tax identification number (NIF) in Portugal, we will appoint a fiscal representative for you. After obtaining your NIF, we can help you open a bank account in Portugal. Opening a Portuguese bank account can be done by us remotely.

3. Choose your investment

Our team of specialists is here to support you in finding the right investment option for yourself and your family members.

4. Make the investment

We can begin securing your investment and will guide you through the necessary paperwork required to ensure a successful investment. As mentioned, the property investment option, along with the capital transfer option, is no longer available. 

5. Biometrics visit

From the time you book your interview, it takes around two months until you can attend a biometrics collection session. You will need to visit Portugal for the biometrics collection. 

6. Portugal Golden Visa issuance

After your biometrics, it takes around four months for your Portugal Golden Visa to be approved. Pay the government permit issue fee. We’ll then collect the Portuguese residence permit card or cards on your behalf and send them to you.

This process to secure a Portugal residence permit can take up to a year for all approvals to be met. After five years of maintaining your investment, you can apply to become a Portuguese citizen. As a Portuguese citizen, you can have access to an array of benefits, from increased mobility advantages to the ability to live, work, and study in the EU. 

Finding Property in Portugal

Even though you can no longer apply for the Portugal Golden Visa through a property investment, here are some tips for those looking to relocate to Portugal and find their dream home.

Always seek the help of an expert real estate agent when purchasing a home in Portugal. The real estate agents in Portugal are known as imobiliaria. Check if it is a licensed real estate agency with a license number issued by the Portuguese Association of Real Estate Agents (Associacao de Mediadores Imobiliarios). You can use this website to check if the agent is registered. Also, remember that while a real estate agent works on behalf of the seller, a property buyer’s agent, such as Goldcrest, works solely on behalf of the buyer, ensuring there is no conflict of interest. 

How much does it cost to buy property in Portugal?

If you’re looking for cheap houses for sale in Portugal, your choice of location will have a big impact on the amount you spend. The most affordable residential properties can be found in the north, center, and Alentejo regions. However, even in the more popular areas, you may be able to find a bargain. 

The most well-known locations for foreigners wishing to settle in Portugal are Lisbon and the Algarve coastal regions. Young professionals prefer cities like Lisbon or Porto, while retirees frequently look for cheap coastal property for sale in Portugal near beach areas like Cascais or the Algarve. Note that Lisbon has its own price range compared to the rest of the country. Still, compared to other Western European capitals, you should still find reasonable prices. 

When it comes to the cost of buying property in Portugal, the location will have a significant impact on price, as will the additional amenities that come with the property and the size of the property. If you are buying in a bigger city, property prices will fall as you move away from the center. This is also the case with the Algarve region. As you move further north, prices will also drop considerably. 

You can check out our article here for a rundown of the real estate market: Portugal Real Estate: Top Investment Opportunities.

The Steps to Buying a Property in Portugal as a Foreigner

How do you buy residential property in Portugal as a foreigner? Buying a home in Portugal is not all that different from purchasing property in other parts of Europe or North America. 

If you are buying a house in Portugal as a foreigner, you will have to:

• Choose which mortgage might work best for you, and get an offer in principle so that you can plan your budget
• Choose the property you want to purchase
• Hire a private attorney to review contracts and ensure that the property is surveyed
• Make a deal the seller will accept
• Go to the bank to complete the mortgage
• Go to the notary and sign the Contrato de Promessa de Compra e Venda (selling contract)
• Arrange a completion date with the seller and pay your deposit
• Pay the property transfer tax (Imposto Municipal sobre Transmisses)
• Sign the Escritura Publica de Compra e Venda (Deed of Purchase and Sale) to register the property in your name.

What kind of taxes and fees will I need to pay?

Even though you must pay fees as a buyer, they will differ depending on the circumstances. The primary expense is IMT transfer tax, which is scaled based on the property’s purchase price. The first €92,407, however, is exempt from IMT, provided the house serves as your primary residence. Consult your attorney about the fees that will likely be assessed, given your situation.

Fees and taxes when buying property in Portugal also include:

• Stamp duty: 0.8 percent of the property value
• Fees for the notary and land registry Are typically mixed and range between 0.2 percent and 1.2 percent of the purchase price of the property.
• Imposto Municipal Sobre Transmisses (IMT): This property tax, which ranges from 0-8 percent depending on the price of the property, is determined on a sliding basis. If the property is a second residence, there is a higher tax payable.
• The seller typically pays the bill for the estate agent’s fees.

You can find out more in our article about property taxes: Property Taxes in Portugal 2024: An Overview.

If you are a tax resident in Portugal, you will also have to pay taxes unrelated to property. Tax residents may be eligible for significant tax benefits under the Non Habitual Resident (NHR) program, provided they are new tax residents in Portugal or have not been tax residents for the preceding five years.

Important note: The Prime Minister of Portugal has recently announced his intention to eliminate the Non Habitual Resident (NHR) regime starting in 2024.

Buying Property in Portugal Pitfalls

If you are considering buying real estate in Portugal, there are certain pitfalls that you should be aware of to ensure that the buying process runs as smoothly as possible. 

• Language barrier: While most Portuguese will speak very good English, Portuguese language is the official spoken language in the country. Having a bilingual lawyer is essential to ensure that there are no communication issues. 
• Legal complexities: Navigating the legal process and property laws can be tricky, so ensuring that you have the help of a legal representative can provide you with guidance throughout the process.
• Additional costs and taxes: You should be aware of the taxes and extra costs that you will need to pay, such as Notary fees and legal fees, and budget accordingly. 
• Due diligence: Ensure you check, double-check, and triple-check the property to ensure that everything is in order. This includes investigating the interior and exterior of the property and doing a background check on the seller. It can also be worth working with a property surveyor to give you extra peace of mind.
• Location considerations: Make sure you choose a location that you are completely happy with. For example, does it have all the amenities you need – an international or Portuguese school, healthcare facilities, nice restaurants, etc?
• Study the market: Don’t go in blind when buying a property. If you work with a buyer’s agent, for example, you can have access to more properties in the market, and they will be able to secure the best possible price for you. 

These are just a few considerations that you should bear in mind. Working with experienced professionals will ensure that your property-buying journey runs as smoothly as possible. 

Get in Touch

Goldcrest is a property buyer’s agent in Portugal and can assist you and your family members in finding your dream home or investment in Portugal. We have deep expertise in Portuguese real estate and will always act diligently on your behalf to negotiate the best possible deal for you.