Portugal Ends Golden Visas, Cuts Airbnb Rentals To Deal With Housing Crisis

By Patricia Vicente Rua and Catarina Demony

LISBON (Reuters) – Portugal on Thursday announced a sweeping package of measures to deal with a property crisis, including the end of its controversial ‘Golden Visa’ scheme and a ban on new licenses for Airbnbs and other short-term holiday rentals.

Rents and house prices have skyrocketed in Portugal, one of the poorest countries in Western Europe. Last year, more than 50% of workers earned less than €1,000 a month, while rents in Lisbon alone rose 37% in 2022.

Low salaries, a sluggish real estate market, policies that encourage wealthy foreigners to invest, and an economy dependent on tourism have made it difficult for locals to rent or buy for years, housing associations said. Portugal’s inflation rate of 8.3% has exacerbated the problem.

Prime Minister Antonio Costa said the crisis is now affecting all families, not just the most vulnerable.

It is not clear when the measures, worth at least 900 million euros ($962.19 million), will take effect. Costa said some would be approved next month and others will be voted on by lawmakers.

A mechanism to regulate rent increases will be put in place, he added, and the government will offer tax incentives to landlords who convert tourist properties into rental housing for locals.

Left-Bloc MP Mariana Mortagua criticized the measures, saying the government was giving tax breaks to landlords who were already “benefiting from (housing) speculation”.

New licenses for tourist accommodation such as Airbnbs will be banned – except in less populated rural areas.

The Social Democrats called the measures an “attack” on the rights of property owners and companies.

To address the housing shortage, Costa said the state will rent vacant homes directly from landlords for a period of five years and put them on the rental market.

Portugal will end its golden visa program, which offers EU passports to non-EU citizens in exchange for investments, including in property, and has been criticized for soaring house prices and rents.

The scheme has attracted €6.8 billion in investment since its launch in 2012, with the majority of the money going into real estate.

Housing groups said the measures would mean little if the government continued to promote other measures to attract wealthy foreigners to Portugal, such as the “digital nomad visa” launched in October, which allows foreigners with high monthly incomes to live and work remotely allows Portugal to avoid paying local taxes.

At a small housing protest in Lisbon, 23-year-old activist Andreia Galvao accused the government of failing in past promises to tackle the housing crisis.

“The goal was for all Portuguese people to have access to quality housing by 2024 – it doesn’t look like it,” she said. “The situation is dramatic.”

The Housing is a Right group said the measures would not change the “existing system” in which large property investment funds control a significant chunk of the market.

“For the vast majority of people, rent will remain unaffordable and buying a home will remain a dream,” it said.

($1 = 0.9354 euros)

(Reporting by Patricia Rua, Catarina Demony and Sergio Goncalves; Editing by Aislinn Laing, Sandra Maler and David Gregorio)


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