Brake on Golden Visas leads to a drop of 4.8 billion

Until the end of April, investments in residential tourism, worth 800 million euros, which would have an impact of 4.8 billion euros on the Portuguese economy, were cancelled.

 

The brake on Golden Visas led to the cancellation – between 16 February and 30 April 2023 – of residential tourism projects worth 800 million euros, which would represent 500 million euros in taxes and the creation of 2090 jobs. The accounts are by Pedro Fontainhas, executive director of the Portuguese Association of Residential Tourism and Resorts (APR) who, in statements to the digital newspaper Dinheiro Vivo, accused the Portuguese Government of making decisions “blindly” and consequently “harming the country’s economic growth”.

“The Government is ending, in a few months, something that took decades to build. It involved an effort by investors, the State and the people and now, with a thoughtless decision, we throw it away”, maintained Pedro Fontainhas to the Dinheiro Vivo newspaper. The President of the Portuguese Association of Residential Tourism and Resorts also warned that investors “they are exchanging Portugal for Greece”.

According to data released by the Portuguese Association of Residential Tourism and Resorts in the newspaper  Dinheiro Vivo and based on only 27 members, the impact of the projects stopped by the Government covers several areas of Portugal, namely: Alcácer do Sal, Amarante, Beja, Castro Marim, Évora, Faro, Grândola, Lagos, Óbidos, Portimão, Reguengos de Monsaraz, Sagres, Salir, Santiago do Cacém, Sines, Tavira, Troia, Vila Real de Santo António and Vila Viçosa. Pedro Fontainhas clarified to the Dinheiro Vivo newspaper that the base of these data and zones are 27 associated, that is, the estimate “is that the true impact in the country is much higher than these calculations”.

The Portuguese Association of Residential Tourism and Resorts is concerned about the growth of the parallel market for holiday rentals, as, within the scope of the “Mais Habitação” package of measures, the rules for Local Accommodation were approved at the end of May in its generality.

“As there is less product available, less tourist apartments in hotels and in independent developments, we are going to go back to the old days when the parallel and informal market or clandestine market for holiday rental housing will grow again. No conditions, no legislation, without consumer protection and without any revenue for the State”, said Pedro Fontainhas to the Dinheiro Vivo newspaper.

Despite this scenario, on May 30, the National Institute of Statistics announced that the tourist accommodation sector in Portugal registered 2.7 million guests during the month of April 2023. These figures represent 6.8 million overnight stays and correspond to to a growth of 16.5% in terms of guests and 13.8% in terms of overnight stays compared to the same period in 2022.

In general terms and according to the report by the National Institute of Statistics, in Portugal, between January 1 and April 30, 2023, there was a 30% growth in terms of overnight stays, with emphasis on foreign citizens and from countries such as the United Kingdom, Spain, Germany, Canada and the United States of America.

The definitive measures for the end of Golden Visas are not yet legislated, and the Associação Portuguesa de Turismo Residencial e Resorts (APR) does not equate to the definitive end. Speaking to the digital newspaper Dinheiro Vivo, Pedro Fontainhas underlined that “If, by remote and absurd hypothesis, investment in tourist units were prevented, it would be tragic. There are many hundreds of millions of euros that are invested in this type of real estate, much of the tourist offer that exists in Portugal referring to apartment hotels and tourist villages. In the origin there is foreign investment and it is not from foreign mega multinationals, it is from small savers who invest in their unit and put their unit to exploitation”.

The Golden Visa Portugal Program was created in October 2012 with the aim of attracting foreign investment. In a decade, it moved about 7 billion euros and, until January of this year, 11,180 Residence Permits for Investment were issued (until December 2022), according to figures released by the Foreigners and Borders Service.

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