Portugal Faces €4.8B Loss as Golden Visas Terminate
The termination of the golden visa program has resulted in the cancellation of residential tourism projects worth 800 million euros in Portugal, impacting the country's economy, a new report has claimed.
The criticism of the termination of the golden visa program, a measure included in the "More Housing" package, comes from the Executive Director of the Portuguese Residential Tourism and Resorts Association (APR), Pedro Fontainhas, who accuses the government of making a "blind decision" and harming the country's economic growth.
Claiming the Portuguese economy has suffered a loss of 4.8 billion euros due to the halt in golden visas for residential tourism, Fontainhas said "The government is destroying, in a matter of months, something that took decades to build. It involved the efforts of investors, the State, and the people, and now, with an ill-considered decision, we are throwing it all away."
The report published by Dinheiro Vivo calls on the Government for “common sense” to avoid a “catastrophe” in the sector, warning that investors are “trading Portugal for Greece”. The impact will be felt both in tourist regions and in the interior, Fontainhas warns. Naming a few regions such as Amarante, Beja, Castro Marim, Évora, Faro, Grândola, Lagos, Óbidos, Portimão, Reguengos de Monsaraz, Sagres, Salir, Sines, Tavira, Troia, Vila Real de Santo António, and Vila Viçosa among others, that have seen their projects halted following the government's announcement, Fontainhas clarified that these data refer only to the 27 members of APR, estimating, therefore, that the true impact on the country is greater than these calculations.
The Portuguese Residential Tourism and Resorts Association appeals for "common sense" to prevent a "catastrophe."
Warning of the adverse consequences of ending the golden visa program, including the flight of foreign investment to other countries, Fontainhas lamented, "Investors are seeking alternatives, and many, for example, are already switching from Portugal to Greece. The country had planned to increase the entry price for ARIs [from 250,000 euros to 500,000 euros], but suspended this initiative due to the flood of investors who moved from Portugal to Greece".
Fontainhas further pointed out that Portugal becomes "undoubtedly less competitive" and has no doubt that the territory's reputation as an excellent tourist destination is at stake. "We need to grow, and we need investment like we need bread to survive. This investment needs to come from abroad because the national economy does not have sufficient capital for this type of renovation and development of the tourism product. We will fall behind and run the serious risk of no longer being a destination of excellence," he warns.
The decline in investment in new tourist developments is expected to lead to the growth of the parallel vacation rental market. When combined with restrictions on Local Accommodation (AL), this situation has the potential to cause the country to regress in terms of progress. Furthermore, Fontainhas claimed that the scarcity of available tourist apartments in hotels and independent developments could result in the resurgence of an informal rental market, lacking proper conditions, legislation, consumer protection while not generating any revenue for the State.
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