INSIGHTS

Portugal as a new home

One real estate purchase can change your life with a “Golden Visa.”… And for Europeans citizens, chose the NHR scheme.

Investing in foreign real estate is killing two birds with one stone, especially if you look at buying real estate in Portugal. Not only can an investment in Portuguese real estate hold your wealth offshore, but you could also earn one of the most popular second residencies offered today.

The first bird we’re killing here is diversification. Diversification is one of the cornerstones of a successful portfolio. In fact, diverse portfolios outperform a concentrated one. By owning a large number of investments in more than one sector or asset class, investors can protect themselves from unsystematic risk, the risk that one encounters when investing in one particular asset. Adding real estate to your portfolio could not only protect your wealth, but it can gain you a lot of global opportunities.

Many real estate investments can lead to residency and, in some cases, a quicker road to citizenship. In rare cases, immediate citizenship is offered after a high enough investment in real estate. This is especially attractive for those looking to expatriate or those who want to earn a second passport in order to extend the amount of visa-free travel that is possible. This can play a key role in offshore retirement or years of stress-free travel.

There are also a lot of tax benefits that come with investing in real estate offshore. In fact, it is one of the few ways that an American can legally keep some of their money offshore privately. When real estate is held directly in an investor’s name, as opposed to in a trust or LLC, the investment is not reportable.

Investors may also choose to buy real estate internationally is to save their wealth abroad. By owning foreign real estate, an investor can keep their money outside of the reach of their local government. There are also greater returns in the real estate markets of other countries.

Now that we’ve covered why you should be considering international real estate to broaden your global investment opportunities, let’s switch gears and talk about why you should be focusing on Portugal.

Invest in Portuguese Real Estate

Investing in real estate in Portugal is a great investment right now. After the market bottomed out in 2012, with prices dropping 11% between 2011 and 2012, it has recovered well and prices began to stabilize in 2013.

Portugal has proven to be a top destination for expats looking to relocate, whether it’s for work or to retire. Lisbon, the capital and largest city in the country, has over half a million residents. The popular metropolitan area saw a 4.9% price increase, and urban area Amadora saw a 12.88% increase in 2017. For those looking to make high returns from the property, apartment owners are seeing a yield ranging from 4.5% to 6.7% in the Lisbon District.

Currently, the Portuguese real estate market is performing well. The strength of the market is backed by a demand that is rising due to improved economic conditions. In November of 2017, it was recorded that the property prices have risen by 4.84% from the year before to around 1,144 euro per square meter.

Luckily, for international buyers, there are no restrictions on foreign property ownership in the country and transaction fees are moderate.

For those looking to relocate, a property purchase may even grant you Portugal’s “golden visa”, earning you five-year residency after buying a property for over 500,000 euro.

Golden Visa ?

The Golden Visa grants the holder to live and work in Portugal, as well as visa-free travel to Portugal and other European destinations. Visa holders can even work in the country if their primary residence is in another nation.

This visa offers investors flexibility and benefits. The program, launched in 2012, grants residency to those who invest €500,000 in Portuguese real estate. The residency is also extended to family members including spouse and dependent children. The visa needs to be renewed every two years and only requires holders to stay in the country for two weeks in the country every two years.

The visa can also be obtained through job creation or investment into qualifying institutions.

After five years, Golden Visa holders can apply for permanent residency and citizenship after six years. One of the biggest appeals to the visa is that the applicant never even has to have lived in the country to gain citizenship.

Non-habitual Resident ?

The non-habitual tax resident (NHR) regime is a scheme established under Portuguese tax law that offers relevant tax benefits to those wishing to set residency in Portugal, since it allows individuals to benefit from a special tax status for a period of 10 years. Foreign source employment income can be exempt from Personal Income Tax (PIT). Please contact us for more information on requirements.

Interested in Expatriation?

If you are investing in real estate for the golden visa, you may be searching for avenues of expatriation. Together with respected law firms in various regions of the world, Dey Capital is advising its clients on expatriation issues. In a world of increasing tax pressure and professional mobility, expatriation has become one of the most efficient tools for asset protection and estate planning. Moving abroad can come along with an abundance of benefits that can affect your taxes, your investment portfolio, cost of living, and your lifestyle. As the cost of travelling becomes cheaper, the benefits of expatriation for financial reasons are more easily obtained.

Taking the leap and leaving your home country can be a big decision with tons of personal and legal steps. The hassle of navigating the legal process of expatriation can be reduced with the guidance of Dey Capital and partners such as Portatlantic. Each step requires assistance, including getting the passport, making sure everything is completed correctly regarding taxes, acquiring work permits, making investments, and more. No matter which expatriation route is chosen, it can be a powerful tactic to allow clients to gain better control of their financial and personal lives.