Real Estate Investor Magazine South Africa August 2016 | Page 55

South Africans have recognised these positive
elements, and those looking for a route to possibly
obtaining a second passport – an EU passport,
specifically – have identified Portugal as one of the
countries to consider for this. The Golden Residence
Permit is a programme established by the Portuguese
government in 2012 to encourage investment in
the country – residency status may be granted after
putting funds into a property or a business. Most have
chosen the property route, purchasing apartments in
the EUR 500 000 range. The size of the apartment
one gets for this amount varies on the location and
the profile of the particular building. Residency status
allows one to travel freely to all EU countries within
the Schengen area – without the bother and cost of
obtaining visas, as with a South African passport.
The Programme is popular among South Africans
- reflected in the statistics released by the Portuguese
government in October 2015. South Africans rank
in the top five nationalities who have invested in the
country and obtained residence permits – along with
Chinese, Brazilians, Russians and Lebanese. One
reason for the appeal is that the requirements are not
onerous – for instance, in the first year, a foreigner
only needs to spend seven days in the country.
The residence rights could lead to citizenship rights
– and hence an EU passport – if the investor meets
particular requirements. An important condition for
the acquisition of citizenship is that the investor must
remain resident in the country for at least six years.
Until 2012, an investment in property in Portugal
did carry some risk, since sales volumes dropped quite
a bit and property development slowed down. Of
course, this meant that prices were generally lower but
investors understood the need for a long-term view as
regards return on their investments.
For the past four years, the picture has been much
rosier. There is now a resurgence in the market, with
both foreign and domestic activity. During 2015, we
saw significant growth in sales volumes with prices
increasing. A real indication of the recovery of the
property market is the construction of numerous
new developments and the completion of projects to
refurbish dilapidated buildings.
An added incentive for property investors in
Portugal is the new trend of ‘hybrid’ residential
developments which include short- and longterm rental operations. Since, with these types
of developments, the developers offer guaranteed
returns, it’s a very attractive option for an investor.
The current positive outlook for real estate in
Portugal looks set to continue into the future, with no
economic indicators suggesting any negative scenarios
are likely to emerge. In addition, the investor may sell
the property purchased after a five-year period.
www.reimag.co.za

Woest advises anyone considering an investment of
this sort to seek professional advice: one benefit is
that the application process is handled by those with
the relevant connections with the authorities, which
makes for a much smoother route.
South Africans looking for the benefit of offshore
investments may find that the Portuguese property
market satisfies their investment objective, while at
the same time providing the opportunity to acquire
travel rights not available to them as South African
passport-holders.

RESOURCES

Irvine Bartlett
AUGUST 2016 SA Real Estate Investor

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