What changes are in the final draft law closing the Portuguese Golden Visa?

As reported, on March 30, 2023, the Portuguese government cabinet, led by Prime Minister Antonio Costa, approved the draft law “Mais Habitação” (translated as “More Housing”). This draft has caused significant public debate due to its content, which proposes to close the country’s Golden Visa program.

Since this date, the Portuguese government has continued discussions within the Council of Ministers, incorporating feedback from various departments and local authorities. The result is a finalized draft that was approved on April 14.

Compared to the version approved on March 30, there are several notable changes in the final draft:

• Any amendments will not apply retroactively to investors who submitted applications before the new law is enacted.
• During the period before the amended law is officially passed and enacted, processes for submitting new cards and renewal will continue as before.
• Pending and future renewal applications will be transitioned similarly to the Entrepreneurial License program, but without the requirement of residing 183 days each year. The government is proposing a residency requirement of 7 days per year or 14 days every two years.
• New applications for residency permits related to investment or support for the arts, as well as the restoration or maintenance of cultural heritage, will be accepted.

This latest draft law will be presented to the Portuguese Parliament for discussion and voting before being submitted to the President for approval and enactment.

What Impact Will This Have on the Future of the Golden Visa?

In light of the strong opposition from various parties regarding the draft law, the aforementioned changes can be seen as positive steps for those interested in the Portuguese Golden Visa. Investors who already hold a card or are submitting applications can be reassured that their approved or pending applications will not be affected.

In addition to this good news, investors interested in the Portuguese Golden Visa should be aware of the following points.

What Will the Next Steps in Parliament Look Like?

After completing the government process, for the draft law to become law, it will be discussed in joint sessions in Parliament, analyzed in specialized committees, and then voted on.

It will take at least two months to complete these stages, depending on the Parliament’s schedule. Specifically, according to parliamentary procedure, discussions will not begin before May 10, and under the general regulations for the enactment of legal documents, it is expected to take at least an additional 45 days.

Furthermore, discussions among political parties in Parliament may lead to additional amendments, considering market pressures during the transition phase to propose adjustments.

Currently, the government and Parliament face significant pressure from independent agencies and organizations representing Portuguese real estate developers, as well as foreign investors and autonomous regions like the Azores and Madeira, which are eager to maintain capital inflow from the Golden Visa. These regions are even proposing to retain at least the Golden Visa program in their local areas.

When Will the New Law Take Effect?

If the Golden Visa program is officially terminated or changed, the new regulations will be applied no earlier than the date the law takes effect (which means it must be discussed and voted on in two parliamentary stages, approved by the President, and published).

Observers are assessing that a grace period for foreign investors will be necessary. While the specific duration of this grace period is not yet known, it is predicted to be around the end of 2023.