Buying Commercial Property for Portugal’s Golden Visa

By James Cave / Published: April 2022 / Last updated: April 2022
Posted in: Visas & Residency

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In 2022, the rules for Portugal’s golden visa changed. Prior to this, you could purchase a property anywhere in Portugal and as long as it was priced at €500,000 or above (or as little as €280,000 if it met certain criteria) that property could be anywhere in Portugal. 

However, as of 2022, things are different. Now, there are parts of the country that qualify for any type of property (either residential or commercial) and there are parts that can only be commercial. 

What do the terms residential and commercial means? Residential property is fairly easy to understand: it’s a property that’ll mainly be a residence. It doesn’t have to be your main residence – it could be a second home – but if its primary purchase is residential, that’s what it’ll be classified as. 

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Commercial property, on the other hand, is non-residential property. For those investing in the golden visa, the most common forms of commercial property are property that’s primarily touristic or a hotel, although it could be something else like an office space or shop as well. 

For most golden visa applicants, however, there are two types of property that appeal the most: hotel investment schemes and rental properties.

Hotel Investment Schemes

A common way to obtain the Portuguese golden visa is to invest in a hotel renovation project, which normally means buying an apartment or room within a resort or hotel. There are a number of these projects and although they differ slightly, they are usually quite similar. 

Here are a few of the things they have in common 

  • Buy-in prices are quite low (typically around €280,000 or €350,000) as the properties are usually in areas marked for urban rehabilitation and so qualify for the lower investment amount
  • There’s usually a buy-back option in year five or six (once you’ve obtained citizenship and permanent residency) 
  • You’re sometimes allowed to use the apartment for one or two weeks per year (important as you need to spend an average of seven days per year in Portugal to meet the golden visa requirements) 
  • The rest of the time, the property is rented out. Some developments will pay you the projected income upfront, while others will pay it out later or as a dividend. Some won’t pay anything at all, but will simply offer a buy-back rate

In practice, this typically means you can obtain the golden visa for around €280k (there are other fees to consider), potentially earn some rental income from the property, get to spend one or two weeks a year there (if you want), and have a guaranteed option to sell it once you have applied for permanent residency and Portuguese citizenship. 

Basically, it’s ideal for those that want a route to Portuguese citizenship but don’t want the challenges of owning a rental property here and don’t necessarily want to spend all of their time here. 

Rental properties

Vacation or holiday rental properties (alojamento local in Portuguese) are a type of commercial property that most people will be more familiar with–even if only in concept. Portugal is a popular destination for holidaymakers, particularly in the coastal parts of the country, and, for certain people, this could be an appealing way of meeting the golden visa requirements and potentially earning an income as well. 

Depending on whether you’re planning on moving to Portugal or simply obtaining the golden visa but continuing to live elsewhere you will want to look at properties that are either suitable for a B&B or guesthouse or properties that are better for renting out entirely (such as an apartment, house, or villa). You’ll also want to check that the property will qualify for an alojamento local licence, as some parts of Portugal have brought in restrictions on this. 

If you’re not planning to live in Portugal – and many people taking part in the golden visa aren’t – you will probably need to use a property management company to handle the bookings, cleaning, repairs, and everything else. This means less profit for you and, even though you’re using a company to manage the running of the property, it also means more admin work. 

Is buying a rental property better or worse than investing in a hotel redevelopment project? It’s difficult to say which would end up being financially better, but the key difference is that you get to fully own the rental property. If it goes up in value, you benefit and you also get to set the rental price and can be responsible for the marketing. However, you’re also responsible for the admin, costs of running it, and will incur a loss if the market changes over the course of the five years. It all comes down to whether you want control or ease

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