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The Portugal Property Market in 2024: A Strategic Overview

Portugal

Portugal remains a highly attractive destination for property investment despite some significant changes in its investment landscape.

The recent discontinuation of the golden visa Portugal and the evolving dynamics of the property market are reshaping how investors and prospective residents approach their plans.

Let’s explore the current state of the property market in Portugal and introduce an alternative residency option—the Portugal D7 Visa—that offers compelling advantages for different investor profiles.

The Current State of the Portugal Property Market

According to a recent report from Idealista, the Portuguese property market continues to experience robust growth, particularly in major cities like Lisbon and Porto. Despite a slight dip in sales volume—down by approximately 25% in 2023—the prices have remained resilient, increasing by over 10% compared to the previous year.

Key Market Trends

The growth is largely driven by a shortage of available properties, particularly in high-demand areas​​​.

Lisbon’s Appeal

Lisbon remains a beacon for property investors due to its vibrant culture, strategic location, and booming tech scene. The city’s property market is characterized by a significant scarcity of homes, pushing prices higher and making it a prime location for high-yield investments​.

Rental Market Dynamics

The rental market in Lisbon is thriving, with rising rental prices fueled by a diverse demographic of expatriates, students, and digital nomads. Furnished apartments in central locations and properties near universities are particularly sought after​.

Government Interventions

The Portuguese government has introduced measures under the “Mais Habitação” program to address housing shortages and ensure sustainable growth. These include tax incentives for affordable rentals, compulsory leasing of vacant properties, and restrictions on new licenses for local accommodations​.

Average Property Price Trend

The graph above illustrates the steady increase in average property prices in Portugal from 2019 to 2024. This upward trend underscores the Portuguese property market’s resilience and growth potential.

Number of Property Transactions

The graph above shows the number of property transactions in Portugal from 2019 to 2024. Despite a slight decrease in transactions in 2023, the overall trend indicates a healthy market with strong activity.

The Portugal D7 Visa: An Attractive Alternative

As the Golden Visa Portugal program ends for the real estate route, the Portugal D7 Visa emerges as a viable alternative for those looking to reside in Portugal without significant upfront investment.

The D7 Visa, or the ‘Retirement or Passive Income Visa,’ is tailored for retirees and individuals with a stable passive income.

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Benefits of the D7 Visa

What are the benefits of the D7 Visa?

Lower Financial Requirements

The D7 Visa requires proof of passive income, typically around €8,460 per year for the principal applicant, significantly lower than the investment thresholds for the Golden Visa.

Extended Stay and Renewal

Initially granted for one year, the D7 Visa can be renewed for two years. After five years, holders can apply for permanent residency or citizenship, similar to the Golden Visa.

Access to Public Services

D7 Visa holders benefit from Portugal’s public healthcare and education systems, providing a high quality of life at a relatively low cost.
Tax Incentives:

The Non-Habitual Resident (NHR) regime offers D7 Visa holders reduced tax rates and exemptions on certain types of income for up to ten years.

Application Requirements

What are the application requirements? To qualify for the D7 Visa, applicants must:

  • Demonstrate sufficient passive income
  • Provide proof of accommodation in Portugal
  • Obtain private health insurance
  • Submit a clean criminal record certificate
  • Apply through the Portuguese consulate in their home country

D7 Visa Versus Golden Visa

How does the D7 Visa compare with the Golden Visa?

D7 visa vs Golden visa

Opportunities for Non-EU Investors

What are the opportunities for non-EU investors?

Non-EU investors interested in securing residency in Portugal can explore several pathways beyond the Golden Visa. The D7 Visa is attractive for those with passive income, but other options exist.

Business and Innovation Visa (D2 Visa)

The D2 Visa is designed for entrepreneurs, freelancers, and independent service providers. Applicants must demonstrate their business’s potential to contribute to the Portuguese economy. This visa provides a route to residency through business activity and innovation.

Study Visa

For those interested in education, Portugal offers a Study Visa for non-EU nationals enrolled in Portuguese educational institutions. This visa allows students to reside in Portugal for their studies and can lead to opportunities for longer-term residency.

Digital Nomad Visa

Recognizing the rise of remote work, Portugal is also exploring a Digital Nomad Visa, catering to individuals who work remotely for companies outside of Portugal. This visa would provide the flexibility to live in Portugal while working globally.

Why Portugal?

As the Portuguese property market landscape evolves, understanding these changes and the available residency options is crucial for making informed investment decisions.

The discontinuation of the Golden Visa and the rising property prices highlight the importance of exploring alternative avenues like the D7 Visa. This visa offers a lower financial entry point and access to Portugal’s high quality of life and strategic location in Europe.

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Portugal offers a welcoming environment for new residents and investors, whether through investment or passive income.