Abu Dhabi, UAEFriday 25 September 2020

Portugal’s socialist government to curb ‘golden visa’ scheme

Investors have been drawn to the country by its lucrative tax breaks and pleasant weather

Foreigners have been drawn to Portugal's Algarve. Getty Images
Foreigners have been drawn to Portugal's Algarve. Getty Images

Portugal is set to revamp its ‘golden visa’ scheme and introduce a levy on wealthy foreign pensioners, as the socialist government curbs enticing tax breaks.

The amendment tabled by the ruling Socialists, who have a minority in parliament, would see retired foreigners arriving in Portugal from 2020 onwards taxed up to 10 per cent of their annual pensions.

They will also revise the golden visas given to anyone who invests 500,000 euros (Dh 2,020,227) into property in Portugal. New restrictions mean the policy will not apply to those looking to buy in Porto or Lisbon.

The visas, which are officially residence permits, also allow travel across the European Union.

Portuguese authorities want to promote investment in low-density regions and in places of high social or environmental value.

Prime Minister Antonio Costa said the visas “should contribute to the recovery of the property market where it’s necessary or in areas of low population density. Fortunately, it’s no longer necessary in the big urban centers.”

Thousands of European pensioners have been attracted by Portugal’s tax breaks and warm climate in recent years.

At the peak of the financial crisis in 2009, Lisbon exempted Europeans from paying tax for 10 years on the condition they lived in the country for six months a year.

But around half of those given golden visas recently are believed to be Chinese.

“Foreigners with the status of non-regular resident will stop being exempted from tax and will face a rate of 10 per cent on their revenue," said Catarina Mendes, the leader of the socialist group in parliament.

The socialist minority government that emerged from elections in October got the green light for its draft budget this month after its former far-left allies said they would abstain.

A formal vote on the changes is still to take place.

The Socialists have 108 deputies in the 230-seat parliament, making it the dominant force.

Updated: January 29, 2020 08:55 PM

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