Has the End of the Golden Visa Real Estate Investment Route Affected Property Sales in Portugal?

The number of property sales to foreign buyers has fallen by around 20 percent since the beginning of 2024. The end of the real estate investment option for the Portugal Golden Visa, alongside the end of the Non-Habitual Residence (NHR), may have contributed to this.

Note that foreign buyers may soon well be able to enjoy significant tax benefits in Portugal, as the NHR program looks set to be reintroduced.  

INE, the National Statistics Institute, has revealed that 33,077 homes were sold in Portugal in the first quarter of 2024, clocking in at 4.1 percent less than over the same period in 2023, and 3.1 percent lower than in the previous quarter. It also showed that this fall in sales was more significant amongst foreign property buyers than for Portuguese buyers.

Breakdown of Buyers Snapping Up Property in Portugal

Below, you can see a breakdown of property buyers in Portugal, highlighting that the most significant drop in house sales was amongst non-Portuguese buyers.  

• Buyers residing in Portugal purchased 31,010 homes, which is 3.1 percent less compared with the previous year and 1.6 less when compared with the previous quarter. House sales has not been this low amongst Portuguese residents since the second quarter of 2020 when the COVID-19 pandemic hit.  

• Buyers residing in the EU snapped up 989 homes in Portugal in the beginning of 2024, a 22.1 percent drop when compared with the same period in 2023 and 19.8 percent lower than at the end of 2023.  

• Buyers residing outside the EU bought a total of 1,078 homes, which is 11.9 percent lower than when compared with the same time in 2023 and 22.4 percent less when compared with the previous quarter.  

Drop in House Sales Amongst Foreign Buyers

The data from INE indicates a significant decline in the sale of houses in Portugal to foreign citizens in the beginning of 2024, with Portuguese nationals now accounting for 93.8 percent of all real estate transactions. To find a similarly low number of homes sold to foreigners, one would need to look back to the spring of 2021.

The drop can be attributed to many factors, including, as of October 2023, the real estate investment option for the Golden Visa no longer being an eligible investment route to apply for the program (the Golden Visa investment funds investment option has proved to be highly successful in its place), and the NHR program coming to an end*, in addition to the current economic climate, with inflation and war in Europe.

It is difficult to pinpoint the primary cause as it seems more likely that a combination of factors has led to this drop in house sales amongst foreign buyers.

*Note: As we mentioned, it looks like the NHR will return to continue to attract foreign buyers with significant tax advantages, albeit with amendments.

Demand Remains Strong

All things considered, Portugal real estate remains a firm favorite, with investors looking for an affordable market with high rental yields and where demand continues to outpace supply, with tech companies, digital nomads and tourists seeking out Portugal. The sublime climate, welcoming locals, high quality of life, and excellent healthcare and education remain key allures for foreign buyers.

The fact that Portugal is one of the safest countries in the world (ranking in seventh position in the 2024 Global Peace Index), has progressive legislation, and where English is widely spoken also adds to the country’s appeal.