Have Rental Income? You Could Qualify for Portugal’s D7 Visa

Let’s talk about the D7 visa – it’s one of the most popular options for moving to Portugal, and for good reason.

The main draw? You only need to show a regular passive income equivalent to the Portuguese minimum wage. As of 2024, that’s €820 per month for an individual.

To put this in perspective, the D8 or digital nomad visa (aimed at remote workers and freelancers) requires four times that amount – €3,280 per month. This makes the D7 much more accessible, especially if you’re planning to include family members in your application.

The key requirement for the D7 is having a regular, passive income. For most applicants, this typically means a pension or social security. However, other forms of passive income that are paid out regularly can also qualify, such as dividends or royalties.

But did you know that you can also qualify as a landlord? That’s right. If you earn rental income from a property you rent out, that also counts as regular, passive income. 

This is particularly good news if you:

• Already own a property you could rent out.
• Are considering purchasing a rental property.
• Haven’t started receiving your pension or social security yet.
• Don’t have the funds required for the golden visa (which typically needs a €500k investment)

In this interview, I speak with Lisbon-based immigration lawyer Sandra Gomes Pinto for more details. 

James: How much would I need to earn to qualify for the D7 as a landlord?

Sandra: That depends on whether you’re applying as an individual, a couple, or including additional family members such as dependent children or dependent parents on your application. 

• For a spouse: add 50% of the original amount of €820
• For a dependent child: add 30% of the original amount of €820

James: Should I purchase a property in Portugal or elsewhere?

Sandra: The Portuguese authorities have interpreted this as foreign-source. I think it’s not a good idea to buy a house in Portugal to rent it for visa purposes. I think it would be a good idea to buy a rental property in Portugal later on, for other purposes, just not for visa purposes. 

James: Besides a rental property, are there any other ways of creating a passive income for the D7?

Sandra: It’s also possible to qualify with an annuity. Some consulates also accept savings for a D7 application, but some don’t. It’s a question of doing it the right way. 

The benefit of this option would be that you don’t have to become a landlord and take on all of the stress and responsibilities that come with that. 

James: Is this net or gross income?

(Gross refers to the whole of something, while net refers to a part of a whole following some sort of deduction e.g. costs). 

Sandra: Normally, the Portuguese authorities analyze only the gross income, unless it’s specified otherwise. However, it depends on how you portray things. If you write that you have an income of €820 per month but costs of €700, it’s possible the Portuguese government would interpret that you don’t have enough to support yourself. 

What you write is very important in the personal statement and how you portray things. There are many details not specified in the law and those reviewing applications have a lot of discretionary powers to decide whether or not you qualify. 

James: Do I need to have a rental contract for a certain amount of time?

Sandra: I think this is the best option and generally, the longer it is, the better. Having at least one year is a good idea. If the tenant doesn’t want a long-term contract, you could include termination options. 

The authorities want to make sure that at least in the first two years, the applicant has enough money to sustain himself and any family members on the visa. 

James: Are short-term rentals (e.g. Airbnbs) accepted as well as long-term rentals?

Sandra: What you need to show is that, on average, you earn €820 per month. Again, it’s important to portray all of this in the personal statement. 

James: If I have a rental in another country, will I need to pay tax in Portugal?

Sandra: The general rule in respect to rentals or real estate-generated income is that you pay taxes in the country where the income was generated. 

James: What kind of documentation should I show?

Sandra: I think the more you can show the better. For example, a lease, a tax return, receipts, and bank statements. Once or twice, I’ve seen the people at AIMA checking bank statements to see if the figures line up with the amount they say they earn, whether through a rental property or rental income. 

James: At what point do I need to start putting the money into a Portuguese bank account as opposed to my own bank account?

Sandra: Up until now, we’ve only seen the authorities at AIMA check to see whether the applicant has sufficient savings in their Portuguese bank account. However, it’s a good idea to show regular payments to a Portuguese bank account. 

James: Do I need to show a certain number of months of rental income before I can qualify?

Sandra: There is a general rule of three months. If you can’t show this, you will need to explain why in your personal statement. 

James: What happens if my income goes up and down over the course of the year?

Sandra: The interpretation of the authorities has always been whether you earn the correct amount on average. It doesn’t have to be fixed every month. 

James: I’m still living in the property I want to rent out. Would a future rental contract be enough?

Sandra: If you can, I would postpone the appointment for a few months just to allow you to show those few months of regular income. We have some clients who have lived with relatives for a few months in order to achieve this. 

Conclusion

This D7 visa route through rental income is an intriguing path to Portuguese residency. It’s particularly appealing for those who already own property, especially if it’s mortgage-free. If you have some savings but don’t quite meet the requirements for other visas like the golden visa, this could be a great option to consider.

While real estate is often seen as a more stable investment compared to stocks or startups, it’s important to look at the full picture. You’ll need to factor in costs like property management (unless you have a very helpful friend or family member), taxes in your home country, maintenance, and potential vacant periods. These can all affect your bottom line.

It might be worth exploring other options too, such as annuities or certain golden visa opportunities. These could offer more straightforward set-and-forget paths, especially if you’re not experienced in property management.

Remember, while the authorities may focus on gross income, it’s crucial to ensure you have enough to live comfortably in Portugal. The minimum requirement of €820 per month is livable, but it doesn’t allow for a great lifestyle, especially if you have additional housing costs like a mortgage or rent. This depends on where you’re living, of course.

The good news is that you can work on a D7 visa. Remote work often offers better financial prospects than working locally, though it comes with its own challenges.

Overall, this D7 visa approach could be your ticket to a new life in Portugal. Just be sure to plan carefully, consider all the factors, and make sure it aligns with your lifestyle goals. With some thoughtful preparation, you could soon be enjoying life in beautiful Portugal!