The state of housing has been the “hot topic” of the Portuguese current public debate, causing a social and political upheaval over the measures that should be implemented to improve housing conditions in the country and make housing more affordable for the Portuguese.

Given the enormous scope of this sector, there is a multitude of actors and opinions to be considered, from tenants and landlords to municipalities, sectoral associations, and other relevant players in this market, such as Mercan Properties, which has invested heavily, 1.1 billion euros, more precisely, in the Portuguese tourism sector through urban rehabilitation of buildings and other non-residential assets.

One of the measures proposed by the Prime Minister of the Portuguese Government - António Costa - concerns the repeal of the Golden Visa regime as a whole, thus neglecting the different particularities and types of property investment under this regime, like the investment in urban rehabilitation, and its benefits to the Portuguese economy. Our experience in the Portuguese market shows that Golden Visa investment cannot be held responsible for speculation in housing prices. Consequently, the Government’s proposal, in its current terms, will not address the housing issue and, at the same time, will bring other problems.

Let's not forget that, since its implementation in 2012, this regime attracted around 6.7 billion euros of investment for the Portuguese economy, creating countless direct and indirect jobs – and for Mercan Properties alone, it has fostered the creation of 550 direct jobs and about 2,300 indirect jobs - developing the country in terms of urban rehabilitation and helping to boost local economies, successively promoting the country as a tourist destination of choice.

Bearing in mind the measures proposed by the Portuguese Government, and to prove the honest willingness to contribute with solutions to the housing crisis, the private sector has carried out several appeals for dialogue, with the aim to demonstrate that foreign investment can be an instrument to improve the public offer of housing in the country. Nevertheless, the private sector and several other real estate experts have also highlighted the importance of preserving a regime model that attracts foreign investment, as is the case, of the Golden Visa. The guarantee of a regime like this will certainly be a great help to the Portuguese economy, especially considering the challenging times we are living in, which highlight the importance of tourism as one - if not the main - source of revenue in Portugal, its excellent performance over the last 10 years and the decisive role this sector played in the country's post-pandemic economic recovery.

Thus, Mercan Properties, fully aware of the facts, gathered by its 27 projects in the country and the years-long experience in Portugal as a promoter of foreign investment in urban rehabilitation, suggests the following measures: Keeping the Residence Permit by Investment program, for investments in urban rehabilitation in the area of tourism, namely through the revision of minimum investment values and the inclusion of mandatory extraordinary contributions to, for example, social and affordable housing and, in case of clear impossibility of preserving the regime for the entire national territory, we also propose preserving it for low-density population areas.

We believe that the impact of the Government proposals if fully implemented, will be tremendously nefarious. The country’s external image does not benefit from these constant legislative changes - even with proposals for retroactive effects - which cast doubt and instability on the market, driving away much-needed international investors, which, if lost, will be almost impossible to recover.

Several relevant stakeholders in Portugal have been adopting similar positions, as is the case of several Municipalities, with the Municipality of Porto expressely stating that "In this sense, the Municipality of Porto considers pertinent to review the functioning of golden visas, which, in the case of our city, were not decisive for the overheating of the housing market, as is sometimes believed. We think that, rather than their pure and simple elimination, it would be more useful to guide the approval of golden visas to investments that promote a minimum number of housing units for affordable rent." A similar position was recently stated by the Municipality of Lisbon.

Even in the last days, the President of the Republic criticized the package of measures for housing, indicating that the Government's housing package is impracticable, and in that sense, it should not even have been presented.

Mercan Properties believes that there is still time to reflect and reconsider the measures initially presented. That is why we appeal to the importance of facts and empirical information that, as we know, do not prove that the regime is a problem, nor do are directly associate it with the housing crisis in Portugal.

by Inês Moura - General Manager of IAS