Wealthy Saffers still packing for Portugal despite new curbs
Rich South Africans using Portugal’s “golden visa” scheme to secure EU citizenship are among hordes of foreigners now prohibited from investing in residential property in swanky coastal cities.
The golden visa was developed in 2012 for non-EU nationals to gain EU citizenship through sizeable investments — mostly in real estate — after five years of temporary residence.
According to Sable International, SA is the fourth most popular country for golden visa applicants, with more than 416 visas issued to SA investors by the end of 2021.
But since the beginning of the year
Lisbon has clamped down, making the push to Portugal by South Africans and others, such as Chinese and Americans, more difficult.
Chris Immelman, head of Pam Golding International, said one of the government’s minority coalition partners “suggested that the golden visa contributed to an enormous increase in property prices in Portugal”.
“It is true that property prices have increased a lot.
“However, we don’t think it is solely due to the golden visa. But the government decided to no longer allow residential investment in Lisbon, Algarve and Porto.
“Up until the beginning of 2022, you could invest €500,000 [about R8.7m] and buy anything in Portugal from an apartment in Lisbon or a villa on a golf course in Algarve to a small farm in the interior.
“But from the beginning of this year Portugal no longer allows investment in residential developments on the Silver Coast, which includes Lisbon, Algarve and Porto.”
However, investment in commercial, retail and hospitality developments in coastal cities is allowed with residential property in the interior of the country.
He said the government’s ban on coastal residences had not stopped South Africans from continuing with their golden visa exit plans.
“If you look at the hospitality and commercial developments, they offer much better value. Most are fairly bespoke, developed for the golden visa, and you can see right through the financial model, which is the interesting part. There is more certainty in what you are investing in.”
Immelman said the investment sum dropped from €500,000 to €350,000 in the more densely populated areas and €280,000 in the less-populated areas for commercial and hospitality properties.
He said the waiting period for residency was up to two years, which suited moneyed South Africans with a long-term exit plan.
Craig Macgillivray, who recently moved to the coastal city of Cascais from Franschhoek in the Western Cape, entered the golden visa scheme before the pandemic and the government ban this year.
“I wanted to secure an option for my daughters to study and/or work outside South Africa, in a country which provided them with a safe and positive springboard for life ... if they so chose. The right to residency seemed to be a bonus on top of a solid investment. It was only after I entered the golden visa programme that I visited Portugal for business reasons and ended up loving the country and deciding to move there permanently.
“Life in Portugal is similar to that in South Africa in many ways — ranging from climate, focus on outdoor living, friendliness of people and access to good health care and financial services. To me it feels like it has, in one country, the best of what South Africa and Europe offer.
“What I don’t miss is the constant need to consider safety and security, especially of loved ones whose movements you can’t monitor 24/7.
“Getting all the paperwork together for the application is a pain, as it is for all such processes, but easy enough if tackled methodically and with purpose. The process to completion [pre-Covid] took seven to eight months.”
Stuart Ferguson, head of 12 Star Capital, which specialises in visa investment programmes, said: “Statistically, Portugal rates as one of the most popular golden visa and investment destinations for South Africans because of the enticing familyfriendly lifestyle and climate.
“This, together with other strong fundamentals, is how Portugal’s property market has lured a significant percentage of high net worth individuals, particularly from South Africa.”
Alanna Slowe, a Johannesburg architect, is emigrating to Portugal.
“We have engaged a legal representative who facilitates immigration to Portugal. My husband and I are looking to relocate to retire, and not necessarily to find work.
“We are not going the golden visa route. We are going the sustainable D7 visa route. They require you to have a minimum of €3,500 a month to sustain yourself over the five-year period until you get citizenship.”
Slowe said the D7 visa did not require investment in Portugal but only proof of passive income.
“Some of the universities lecture in English, which will be beneficial for my children. We don’t have to buy property, we can lease.”