The program lets in on the order of a few thousand people per year.
Other visa programs there vastly outstrip this is number.
The golden visa is just a great marketing term for political ire. It implies wealthy privilege so it's easily targeted.
Of course, the reality of things is that Portugal has recently rightly earned a reputation for being a great place to live and people (not many of them super rich) decided to live there. Housing is being built to compensate.
The airbnb thing is more interesting and nuanced but harder to get a handle on. It might be that airbnb is causing some unhealthy things in the real estate market.
> The airbnb thing is more interesting and nuanced but harder to get a handle on. It might be that airbnb is causing some unhealthy things in the real estate market.
I have friends living in Lisbon and Porto for 10+ years, others that were born and raised there. All of them mention how entire neighbourhoods are slowly being emptied out from locals and getting rented on AirBnB. It's more profitable to rent an apartment short-term for a season than having permanent tenants. There are neighbourhoods hollowed out from people living in them and are just boxes to be rented during peak tourism season and left empty during winter.
It's not so nuanced if you see the transformation happening in your city, you notice your friends living further and further away from where they grew up, you walk through the same places and see the language being spoken on the streets is not what you were used to. You check prices for T1 and T2 apartments and they skyrocketed, are very hard to find through real estate services but can be found easily on AirBnB.
> I have friends living in Lisbon and Porto for 10+ years, others that were born and raised there. All of them mention how entire neighbourhoods are slowly being emptied out from locals and getting rented on AirBnB. It's more profitable to rent an apartment short-term for a season than having permanent tenants. There are neighbourhoods hollowed out from people living in them and are just boxes to be rented during peak tourism season and left empty during winter.
I'm currently living in Nashville, Tennessee, and one can see the same effect here.
The town is completely unequipped to handle the level of tourism and unregulated hotels it has. The price of housing has shot up to insane levels (by local pay standards), and neighborhoods are inundated with drunken revelers.
I would never wish this fate on a city, but many seem to foster/welcome it with open arms. I know Nashville has, because the tourist money spends. But be careful what you with for, turning a city into a theme park / tourist destination has some horrible effects on the people who actually live there, and it seems like it should not be sustainable.
Sadly, it looks like it is. For another example in Tennessee, look at Gatlinburg and Pigeon Forge. Even as recently as 50-60 years ago most the locals lived in the areas. Since then, they've been priced out by all the tourists and cabins, etc. And it doesn't really show any signs of slowing down, to my knowledge.
The same in Amsterdam. The 55 square meter apartment that I lived in from ages six to ten is now split into two studios rented out on AirBnB in the hipster neighborhood of 'de Pijp' for a large multiple of what it would fetch in rent (which are already way too high).
This goes for many of the listings on AirBnB in Amsterdam, four stories worth of not-quite-a-hotel instead of room for four families to live are pretty common. And there always was a housing shortage in Amsterdam, now it is much worse than before.
Yes but the difference is that expats in Amsterdam work for companies based in the Netherlands.
They ad to the economy they aren't just here for the weather and cheap housing (nobody comes to the Netherlands for the weather and cheap housing).
this is an issue that I've seen in several beach towns in france as well, and it's not limited to airbnb. You will see real estate places that offer weekly rentals of beachside properties at very high rates. Of course those places are basically unused outside of that.
This sort of stuff sets in, and then of course people are shocked that their entire local economy lives or dies off of one season. We should build more housing of course, but limiting the percentage of places that can just be sitting empty most of the years seems super important. At least making it extremely expensive to keep them empty
Somehow the regulators (and governments) prefer more money over their own citizens. Banning short term rentals would solve (or atleast reduce) housing problems in many cities, while tourists can still come and stay in hotels.
We are building, but building takes time, and all the houses and apartments are bought by 'investors' that then use them for airbnb... This is even more true in places like portugal (and many others), where realestate prices are so high compared to normal peoples income (due to speculative and airbnb investments), that normal people cannot afford them anymore, and only people with a lot of money or other realestate (for mortgages) can buy them, and the best way to earn back investments is again, airbnb.
So, you need to both build new stuff and ban airbnb for any chance that normal people with normal incomes will ever be able to afford to buy anything decent to live in. Also somehow stop buying realestate for investments. Also fix zoning laws in many places. Also...
Building more housing just to satisfy speculative demand never ends well. You get ghost cities/districts and lots of pink elephants; and when the bust comes, its a huge mess to clean up, and a lot of those units will never be used before being torn down.
Housing doesn't follow the simplistic supply/demand model. What happens in a lot of places here in Europe during the past 10+ years of low interest rates: developers + investors buy land and buildings to develop them, either chopping up older larger apartments into smaller units or building new housing but they don't sell all of them at once after developing. They hold onto units and drip-feed the market to keep prices high, the lost opportunity cost of selling earlier is offset by selling later at the inflated price.
I bring up low interest rates because getting a larger amount for a mortgage is cheaper, buyers will go to banks to check what's the largest mortgage they can get to fit into their budget to then go shopping for a house, so the prices are directly correlated to how much credit you're able to get, pushing prices upwards which the investors/developers can scoop up.
Now prices are extremely high, mortgages aren't so easy to get and we see prices going down (here in Sweden there's been a 10-20% fall), but they are still much, much higher than 10-15 years ago. It's pushed people like me, with a decent salary but no family wealth whatsoever to be basically priced out of the market. I'd need to save about 20-30% of my net salary every month for about 2-3 years to afford just the down payment for a small apartment on the outskirts of the city. I'm not able to do that while my parents depend on me and I still have rent to pay.
>Housing doesn't follow the simplistic supply/demand model
Yes it does, and I'm tired of pretending that it doesn't.
If I want to build a house in Portugal, if I am even allowed to do so, I will have to spend about half of the cost to the government.
From VAT, to real estate tax, to licensing fees, etc... That's a significant portion of the cash spent going directly to the state for no actual practical reason.
And that's not even mentioning the time spent dealing with all that, or the fact that housing is essentially banned in the majority of the country.
My family has been in real estate for generations, and Ive listened to multiple generations on both sides of the family for years struggle with these politically inflicted issues.
There is no housing crisis.
There is a political choice to make housing unaffordable and unbuildable. Anything that doesn't address that issue will only make things worse.
>Yes it does, and I'm tired of pretending that it doesn't.
It doesn't, because the housing market is not the "free" market like the one for commodities, but is an asset heavily manipulated by government, banks, NIBYs and institutional investors to maintain a steady increase in value of their investments above inflation, and incidentally above wage growth. The bigger the growth of their investments, the better for them.
It really, really is that simple and anyone making the argument that it isn't either hasn't thought this through, has never actually looked at the data, or is outright maliciously lying about it.
A Twitter chart vs the arguments of people working with research in housing departments in some of the largest cities in the world. I guess I know what source I'll actually trust a bit more.
For a lot of these places there are enough houses for the people who want to live there. Or it's a whole hell of a lot closer. The issue is there's not enough houses for the people who want to live there and all the tourists who feel entitled to be able to stay in a house on their vacation. A house that takes away from locals, and destroys any culture of the neighbourhood.
There are close to enough for the locals. The problem is when tourists feel entitled to houses, like I said. Stick them on the periphery, and let the locals actually live where they work. Instead, we're doing the opposite, and destroying cities and neighbourhoods and pricing out locals in the process.
> What right do you have over the property of others?
I suspect this is where we're going to inherently disagree. People don't own their property in a vacuum, nor do they (nor should they) have unlimited 'rights' to do what they want with it. We don't let people dump toxic waste or oil on their properties for good reasons, and I think extending this to short-term lets is perfectly sensible due to the overwhelmingly negative benefit it has on residents. Doubly so when its corporate landlords in question doing it.
The cities that built 1000 times more houses are actually more expensive. Does anyone think that Manhattan-like density in San Francisco is going to lead to Houston prices?
Low interest rates also mean it’s practical to hold real estate and drip-feed the units. Much harder to do when you’re paying 10% interest on a construction loan.
If it were that easy and simple, it'd have been done.
The places where AirBNB and their like are causing problems are not in the places where there's abundant land going, it's in the areas where there's significant tourist demand. This is in the cultural hubs.
People with capital are able to buy up the limited stock of housing and make a lot more money through short-stay, rather than long-term tenants.
This causes major flow-on effects.
Businesses which cater to long-term residents find their customers disappearing, and leave in favour of those catering to tourists/visitors.
The nature of the people in the area change: people in short-term stays are less likely to respect the local cultural-norms like not partying until 3am, or other behaviours.
The people who work in the local businesses, find it harder to do so - instead having to commute from longer distances because they now can't afford the rents/property prices locally.
Knocking down a few apartment blocks and putting in more high-density accommodation won't solve it.
Changes can be good and bad. Without regulation the incentives can hollow out desirable places of all but the richest occupants and tourists. Over time even the rich may leave if the help cannot afford to live or commute to serve them. The end game could be ghost towns or whole communities essentially becoming artificial, amusement parks.
You cannot build new houses in Venice, or Amsterdam center. That's where tourists want to go, not in those new houses in the peripheries where you would forcibly relocate your citizens with the proposed housing projects.
It's crazy that Portugal, a country with almost exactly the same GDP and population as Hungary, Lisbon has average square meter prices reaching 7k EUR/m2. Budapest is barely 2-2.5k EUR/m2. That's just the effect of airbnb.
That’s kind of funny, I just spent a week meeting a Hungarian co-worker who, from the sound of things, refuses to return home until Orbán is out. She claimed that there were state-sponsored billboards that read things like (this is her words) “IMMIGRANTS RAPE WOMEN.”
If there’s any truth to that, then I’d say their rental market is pretty well-protected from foreign workers, to say the least…
100% true in Ireland. In 2020 the number of long-term lets doubled due to AirBnB people fleeing into long-term when tourism was basically non-existent. Sadly, they've all moved back to AirBnB by now, and Ireland is now facing the worst housing crisis yet.
Yes, it's a small program but it has created some negative side effects - although you could also consider them positive, depending on your viewpoint. I've been living in Lisbon for 14 years as a EU citizen and currently have to renew my permanent residency card. Unfortunately, the authority SEF responsible for that is not reachable. Online processing doesn't work, making an appointment online doesn't work, writing emails returns auto-replies to call them, and I've given up via phone after more than 60 trials. Even when you get a connection, they don't respond. So I've contacted an immigration lawyer, and they several times mentioned "Gold Visas" and later sent me an offer: 500.- EUR for an appointment they would make with SEF. This might sound like nothing to people from elsewhere but these are substantial amounts for someone with a Portuguese salary. However, this would be peanuts for a Gold Visa applicant.
Problem is sef has been extinguesh (but not really) a few years ago due to an high profile case with them beating to death a ukranian man. For the ‘left’ in this country it is also considered a racist institution. Problem is, as with all that is done in this country, they announce the end, make no real plans for alternatives, leave the people working there in a limbo, noone gets hired and people leave, but they get more and more work to do with the immigrant influx.
The golden visa wasnt already the big deal since it wa slimited, but the digital nomad visa (over two thousand issued in just a few months) and the open door policy of this government (you dont need even a promis eof work anymore to just come to portugal) overwhelmed the services. And then there is the stupid laws that lawyers and other classes working in behalf of clients have priority in these services
Are you claiming that a few thousand of these visas a year overwhelm the system? Then the investment visas are not the problem. The problem is the agency responsible for processing these and the attorneys knowing of the service shortage take advantage of people. Supply/demand. It’s not meant to be affordable for people, it’s meant to be expensive because if you’re reaching out to them to renew, you’re probably desperate.
In UK just filing an application for a normal work visa for a family of 4 costs o
£10,000. This is what the government 5akes, no lawyers
For each applicant, there is a ~1500 application fee and ~1500 healthcare fee ( NHS, 3 years). Ofcourse you will be paying for NHS twice because you also pay the taxes to fund NHS. Spesifics will differe with individual case, but thats the broad strokes.
If you need a lawyer to explain something, they rarely get up for less than £500
Yes, but we're not talking about a work visa, e.g. my case is about a process that would normally be automatic by the press of a button. They even have a web form, it just doesn't work. As someone else noted, the problem is that this agency has become virtually nonexistent and unreachable due to re-structuring and Covid, yet nevertheless keeps being required by law for essential services. I've been tempted to start a EU solicitation process, but then again, being confrontational with an immigration police who have already unlawfully killed an immigrant in the past does not seem to be a good course of action.
SEF has spent a significant amount of time, energy, and money dealing with the Withdrawal Agreement situation for post-Brexit British immigrants. An entire program was set up to convert EU-standard residency paperwork into a customised biometric residency card for around 46,000 people.
That process will be over soon, and SEF may find it has time to spend on other issues.
That may be true and I'm sure individual SEF employees are not to blame, but that still doesn't explain why they've made a web page with a button "Schedule Appointment" and when you press the button it says in red letters "Making an appointment online at this time is not possible" or why they have someone who seems to read emails you sent to them and chooses different replies each time, only to tell you in different ways you need to call them by phone, or why their phone system accepts calls, opens the line (as a technician by the telecom confirmed), but no machine or person actually replies.
It was mostly used for wealthy foreigners to acquire real estate, hence the ire. As for AirBnb, it has decimated historical neighbourhoods in Lisbon and turned its historical areas into a kind of theme park.
Which should be bringing money into Lisbon to the net benefit of all people living there. If most of the theme park money isn't staying in Portugal then they should pass some legislation to favor the local economy.
That's a tough sell for, say, a barman whose landlord realises they can double their rental income by doing short-term lets. Just because there's suddenly a lot of money flowing in, doesn't mean all people immediately benefit (or even eventually benefit), and in the meantime those who already lived there suffer an explosion in prices for renting and buying property.
They don't just destroy the local economy. They also destroy trust in politics - always fragile at best - and hugely increase the odds of a racist/fascist government.
We've already seen this in the UK, where a drum beat of race hate aimed at immigrants and refugees has been used to misdirect the population away from neoliberal austerity and "low tax, small government" (big profit) policies.
Which - not coincidentally - include a huge amount of literal rent seeking and property profiteering.
> Portugal is a small country of 10 million with another 450 million people entitled to move there freely without visas
For a stay of up to three months[0], yes.
Remember that when people talk about freedom of movement within the EU it's actually the free movement of workers[1], meaning beyond three months, you have to meet certain conditions, and will likely need to demonstrate you have income/employment/insurance/social security/pension...
That's academic. Apart from very rare cases where someone has been deemed an "unreasonable burden" (e.g. homeless creating problems) no-one is going to be deported. In fact no-one tracks who's in the country and how long they stay.
Certainly, for the purpose of this discussion the point is that anyone who's got EEA or Swiss citizenship can freely move and live in Portugal. So if some people in Portugal think they are being overwhelmed there is actually little they can do.
Are you suggesting that EU citizens are allowed to stay for more than 3 months in Portugal without a residency certificate?
> In fact no-one tracks who's in the country and how long they stay
This is typically completely fine, right up until the moment anyone in authority gets a reason to start asking questions:
"When did you arrive in Portugal, mytailorisrich?"
"Ah, over three months ago. Can you show me your residency certificate?"
<sucks air through teeth>
"Can you explain why you didn't get a residency certificate?"
In practice EU people would be free to lie about when they arrived, your EU passport don't get stamped when entering another EU country. You don't even need a passport, your ID card is sufficient for travelling inside the EU.
I have no experience with Portugal, but the vast majority of deporations in Austria are other EU citizens who stay for longer than three months without permanent registration. You need to show proof of being able to support yourself to move to other EU countries.
First they need to show proof that you are staying there for longer than allowed. How do they do that?
(Assuming of course that you are staying in hotels and airbnbs, or even at relatives / friends - of course, if you rent and register officially then it is obvious.)
>First they need to show proof that you are staying there for longer than allowed. How do they do that?
At least here in the democratic republic of Hungary: Cell network subscriber logs, ATM/POS flags, the passport number you enter when getting your public transit pass, the filed invoice the phone repair shop fills out when you get your battery replaced.
If you're a backpacking 20 year old it's very unlikely anything will happen to you, but if you're running a business or a "digital nomad" making FAANG salaries you'll get a rude awakening one morning with a knock on the door.
If you're making FAANG salaries you just register and be done with it.
The whole discussion is not very relevant and is a nitpick. The point is that anyone in the EEA/Switzerland can freely move to Portugal (or any other country) and that unless you get onto the authorities' radar very negatively you are safe. The vast majority of people will have an income and/or look for work and will be entitled to stay, anyway.
> First they need to show proof that you are staying there for longer than allowed. How do they do that?
It's not like police is ramping up people who stand somewhere for longer than N months. These cases typically come up because people end up homeless, are trying to start claiming benefits, are dodging taxes or are otherwise appearing in front of the authorities.
> In practice EU people would be free to lie about when they arrived [..]
That's fine, until it isn't.
> You don't even need a passport, your ID card is sufficient for travelling inside the EU
I've slightly lost track of the scenario here. Are we talking about a hypothetical northern European who basically moves to Portugal without telling anyone? Is she registered as self-employed? Does she have a bank account? Does she have any dependents? Does she own a car? Does she have insurance? Does she still have a permanent postal address in the northern European country?
Are all those things running as if she were still living in her original EU country, and she's just in Portugal "off the books"?
They don't need to be registered, that's the point. Legally, yes, practically not.
Because you know, they are coming from somewhere, another EU country, where they have a permanent address, a bank account, a job even (they are just working remotely), a mobile which works for the first few months via free roaming, a car which they take back to their home country for the yearly checks, health insurance which is technically only valid for emergencies in another EU country (but if you are seriously ill you'll probably want to go home anyway)...
It may or may not work in all cases (for example, in Italy they like to confiscate cars with foreign license plates that are illegally staying there - don't ask me how they know).
But if you imagine an average 20 something, still living with their parents, but wanting to travel across Europe while working remotely, then today this is very easy and straightforward to do. Without telling anyone. Except their parents, of course :)
Portugal recently introduced a separate Digital Nomad visa.
In practice it's nonsense to pretend you can just turn up. You need access to the health service, you can't rent without a tax ID, your car needs to be insured, and so on. All of which require registration. And there are occasional ID checks, which will raise questions if you don't have a residency certificate.
So even if you want to live out of your car - which sounds like fun - you're still going to leave a paper trail and face some risk of awkward questions and perhaps a fine and/or deportation.
> Why would you need extra car insurance? Is your car insurance not valid for all of Europe?
Check the wording of your car insurance policy. I doubt regular car insurance covers moving abroad without telling them. Oh, and the vehicle registration isn't going to be valid either[0].
Let's say our hypothetical person has a car accident, a serious one, where the police get involved.
She was driving her (say) Swedish car, with [technically invalid] Swedish insurance, with [technically invalid] Swedish registration and number plates, they ask her for her ID, she shows her Swedish ID card [can't show a residency permit, she chose not to get one].
One big hole she digs herself if she starts lying to the police. A different hole, but a hole nevertheless, if she tells the truth.
> I'm not saying anybody SHOULD do this [..]
Quite
> but there are some people who definitely COULD.
(Not wishing to sound too old and grumpy) but there might just be a whiff of this sounding like it's the story of young privileged well-off types who can't be bothered to follow rules everyone else has to, thinking it doesn't apply to them, and expecting to get away with it when things go wrong? :)
As an example, I have seen videos of "house sitters" in Portugal that effectively "work" by staying at other people's houses while the other people travel, usually for longer periods, eg. weeks or even months. They water the plants, feed and walk the dog, make sure the property is lived in. They are not officially living there, but practically, they are. I was surprised that it is possible to make a living of this, but apparently it is!
> the EU it's actually the free movement of workers
You can also be self-employed in that country or a student. So it does not apply just for workers. My guess is that its written in that way to give police power to remove homeless people from different countries.
As I understand it, that rule exists to stop people from moving 'on paper' to collect social security in a rich country while they keep living in a lower cost of living area. Which is nevertheless seems to be quite an issue in some countries. (Not that your explanation is automatically wrong)
Finally! The situation is getting to ridiculous levels. Yes, influx of foreign talent and investment is good, but it's an extreme situation that is out of control.
Expats were able to evade all taxes due to crypto exemption, and rules for income from foreign country companies. Locals fund social infrastructure while expats use it, dry out the housing market, and raise prices through gentrification.
Golden visas are a loophole for sanctions against Russia's aggression (at least one well known oligarch has a Portuguese golden visa), and it's ironic that you can buy a visa with 200k while refugees die in the Mediterranean trying to seek asylum and safety.
> golden visas are a loophole for sanctions against Russia's aggression
No. Portugal doesn't accept Russian citizens for golden visa since the war started. And do not process applications started before.
> one well known oligarch has a Portuguese golden visa
No. He didn't do the golden visa. He got it in a different way. He have got it "under a law that offered naturalization to descendants of Sephardic Jews who were expelled from Portugal about 500 years ago during the inquisition". And he received it about a year before the war and the sanctions.
There's a reason why VAT is not enough and we also pay income tax to fund any country's budget and all the infrastructure. Being a digital nomad is basically a taking advantage of a bargain that is getting away with that VAT only.
Generally speaking, you don’t become a tax resident of a country unless you live there for 183 days in a given tax year. Even then, getting set up to pay taxes is a challenge, as tax departments aren’t set up to accept money from a tourist who doesn’t have any official ties to the country. It can be done, but it’s a pain.
As a digital nomad myself, I always planned to just never stay in a country longer than six months. As an American, I have the joy of paying American taxes anywhere I live in the world, which makes things extra fun.
For now, it seems systems are not streamlined to handle the burden of a high number of short term residents. Countries will adapt over time, as it seems Portugal is doing now. Some countries issuing digital nomad visas may exempt nomads from paying taxes or make it easier to pay taxes locally.
> Generally speaking, you don’t become a tax resident of a country unless you live there for 183 days in a given tax year
183 days may indeed be sufficient to automatically qualify you for tax residency, but there are other tests, if you're not careful you may (unwittingly) become tax resident in a country with a stay of less than 183 days.
Perhaps significantly less, depending on where else you've been (and for how long), and what you were doing in the year(s) before the year in question.
Depending on their country of origin. Most western countries have rules that make income originating in other countries taxable in their home country (and then often have bilateral treaties that avoid income being taxed twice).
Quite a few digital nomads are tax frauds, though.
Not sure why you're downvoted... It's true a lot of digital nomads wilfully ignore the law and are unintentionally committing tax fraud. I know I did when I first started 16 years ago.
Being a digital nomad does open great ways to pay very little tax but to do that legally is a more complicated process than just ignoring tax and not paying any attention to dual taxation agreements.
The US is unique in that you're always considered a tax resident.
But for example, if you live in Canada and decide to travel to a few countries for a few months at a time as a digital nomad, getting paid in those countries, then come back to Canada, you have to declare and pay tax on all that foreign income in Canada.
You need to actually break tax residency in Canada in order to stop paying taxes. And it's not easy, you need to pay all capital gains tax due as if you sold everything the day you break residency.
I think it depends on how one interprets the parent comment. I read it as a home/residence country taxing worldwide income, which is true for most Western countries. The US is unique in taxing worldwide income (with notable exemptions) based on citizenship, but I’m not sure that’s what “home” referred to?
> The US is unique in taxing worldwide income [..] based on citizenship
This is technically correct, but many other countries use a similar principle called the worldwide income principle, in which all your income, no matter where it is being earned, is taxable in the country they originate in / spend most of their time in (rules vary widely, I am not a tax lawyer).
You're mixing wildly different things. Regardless of where you come from, if you live in France you pay taxes in France on revenues obtained (even if they didn't originate from France). If you're a French citizen living in Canada, the French tax authority doesn't care about you.
There are a few extremely rare exceptions to that, most notably the US, which wants to tax US citizens on any income generated, regardless of where they live and where the income is from. So a US citizen living in France getting paid from a French company has to pay taxes to France (due to living there) and the US (due to being a US citizen). There are tax treaties so the taxes paid to France would be deducted from what is owed to the US.
World income principle works the same, only it thethers you based on main area of presence, not nationality.
A Turkish citizen mostly living in Germany (-> Steuerinländer), but working in France for a French company will pay German and French income taxes (and may get the French taxes back from Germany after handing in his tax forms next year).
It's the same thing, only that nationality does not matter, residence does.
If someone is traveling in a tourist visa, why should they pay local taxes? They'll put money into the local economies where they're traveling just like any other tourist.
If someone is traveling on a tourist visa, they are not allowed to work in the host country.
So now they are not only potential tax evaders both in their host country and their country of origin, a crime in many countries worthy of lengthy jail sentences, but also tack a visa violation on top of it.
If I’m visiting country C and read my work email or take a work Zoom call, have I violated my tourist visa? If I check that email all 6 nights in my 7 day stay?
At some point, I think it flips from “a genuine tourist” to “an undocumented worker”, but I don’t think it’s easy to tell exactly when, especially if the actual job isn’t a local one.
If I’m on a tourist visa and taking a local job, the country’s documented workers should rightly feel cheated. If I’m on a tourist visa and brought my own job from outside the country, I’m not sure those workers have nearly as much standing to feel I’m cheating them.
> If I’m visiting country C and read my work email or take a work Zoom call, have I violated my tourist visa? If I check that email all 6 nights in my 7 day stay
I would not be surprised, but that's a question for the lawyer and the answer may vary by which country you're in under a tourist visa.
And likewise you may be owed overtime ;)
> If I’m on a tourist visa and brought my own job from outside the country, I’m not sure those workers have nearly as much standing to feel I’m cheating them.
Yeah well people are weird and not always consistent. From my point of view, people seem to care more about "immigrants taking our jobs" than they do about "foreigners staying at home and the factory was moved to where they already live" (not zero for the latter, this is just my opinion of the relative noise people seem to make).
They call it the tour, basically you travell along the mediteranean, from AirBnB to AirBnB, working from cafes.. you are not a permanent resident in any of the countries.. :D
Depending on dual taxations agreements of their country of origin, they most likely would have to pay tax if they followed the law. There's often a clause in the different dual taxations agreement that says that describe how to determine tax residency in case the person hasn't stayed in any country more than 183 days. Usually, it's the country where that person has the "centre of vital interests" or sometimes can be determined by nationality.
Digital nomads are still too new a phenomenon that countries really properly seek to tax them but just traveling like this without being careful or creating a company in a country with low taxation is not necessarily safe.
It’s often repeated online but that won’t work as a defense in courts. It can be qualified as tax evasion, in theory any country visited during the “tour” could ask for taxes if they believe you’re trying to escape the system.
In most countries, I believe they should, but if they're being paid from another country, it may be relatively easy to get away with not paying income taxes -- since the country of residence would have no record of the income in the first place.
This. I know a few people who work remote and just live on tourist visas in different countries. They get paid in the US and deposited in a US account. They have no bank account, ID number, nothing in the country.
Some do, many don't. Many don't even bother getting an appropriate work visa, at their latest port of call, there's no way they are going to be paying local taxes on that work.
Usually, no, not on foreign income (with the exception that now retirees pay 10% on their pension, but it used to be 0). And even on domestic income from work, they pay only a flat tax of 20%. The income tax is normally 50.5% on income over 80k and 53% over 250k.
VAT and income tax are scams that tax work rather than wealth. So the wealthy pay far less than the hard-working working class.
We need wealth tax, property tax, land value tax, inheritance tax, capital gains tax, and nationalised resource industries so we wouldn't need any VAT or income tax at all.
I doubt killing the golden visa will alleviate the housing problem as it does not remove houses from the short term rental pool. The real solution would be to limit short-term rentals to some small (< 1%) portion of total stock per a neighborhood/postal code. The license for these would be given out by lottery each year. Enforce with heavy fines for operating without the license...like 30x nightly rate of the unit.
This has been somewhat curtailed this year; right now profits from crypto assets are usually exempted from tax if held for at least a year and pay 28% otherwise. This is a much more favorable treatment than other financial assets, which normally pay 28% if held for over a year, but if held for less an year and you make around 80k can be added to your work income and pay the usual income tax rates (which is already 50.5% over 80k).
Indeed, I was never fine with them, they were always a short sighted solution to quickly get some funds via possible investments, while making things even harder for us.
Golden Visas probably didn't cause too many problems - they are easily palmed off with peculiar concrete and glass boxes in odd places, not like they'll be living in them much anyway.
AirBnB is what has been causing the problem with affordable accommodation in the city centres. Tourists want easy access to everything downtown, same as students and young professionals, and at 100 euros a night or whatever the going rate is is unbeatable for yield.
The trick now is to start turning these places back into HMOs / family apartments. It's nice that they've been done up, now time to give them over to local residents. If some 'funny money' gets royally screwed in the process, then all the better.
Yeah, it smells too much like the Golden Visas are being used as a scapegoat, to make it seem like the government is Doing Something. I agree that GVs are probably a net negative for a local economy, but I doubt they contribute significantly to housing unaffordability.
The measures announced are far more ambitious than this article suggests.
The one that will cause the most controversy is the State taking over unused housing, making improvements if needed, and then renting the properties (with the money going to the owners after deducting expenses). Yeah, I'm sure that will go over well...
I generally don't like state intervention, and I'd prefer hefty taxes on unused housing (at least where housing is needed, no need to punish empty buildings if there's oversupply), but I'm fine with the idea of curbing speculation in housing that doesn't include intent to actually provide housing.
I'm fine with additional taxing of those houses, but having the state take over the renovation and renting processes is a recipe for corruption (which, given Portugal's recent history, makes me think it's actually the real purpose of the measure).
I assume that's already the case, everywhere, isn't it? Germany certainly has that issue, state-owned housing companies have some very nice flat and they're very affordable, but you need to be connected to have a chance to get them. It is what it is, corruption finds its way into everything everywhere.
Now imagine the government having the power to do that on every vacant property. Not just state-owned: all private-owned but vacant properties could be forcefully rented.
There's more chance for corruption, but at some point each connected person needs to rent 4 apartments to fill all the space, which they won't, so it'd likely still be a net-positive effect.
And unlike normal nationalization campaigns, it's easy to keep the government from making itself the owner's administrator: just rent out your rental properties. I understand that it's nicer to let them sit empty and wait for prices to double and not deal with renters because rents are a joke compared to price increases, but that's not going to work out.
I could live with a different alternative: the government declaring the buildings condemned and rezoning them as non-construction ground. That'll quickly motivate investors to actually put the houses to use.
Anecdotally, when I visited Lisbon last year, every taxi driver was extremely friendly and constantly encouraging me to buy some property and move to Portugal.
Obviously this is a small sample size, but my impression was the people I talked to all genuinely welcomed foreigners (and their money, sure) in a way I haven’t experienced in many other places. Other expats I talked to in Portugal agreed with this.
I think the Portuguese may find that the only thing worse than positive net migration is negative net migration.
I was in the northern part of Portugal in 1996; didn't get farther south than Porto. I actually saw ox carts on the roads. If I had to guess, I'd guess the main AirBnb action is in the south.
It was a very nice country, and I totally support their desire to keep it that way. With the understanding that it's hard to get foreigners' money without making some tradeoffs (namely, your main industry becomes catering to their needs).
With the few natives I talked to, a common dream was to go to America and save up enough money to come back home and be wealthy.
It was the dream everywhere in the world last 20 years, but all of us had face the fact that by the time we went back home, home price have risen much more than what we expected.
Well, that should be subject to empirical testing, at least: how many emigrating Portuguese returned to Portugal? Versus, how many non-Portuguese have bought property there?
Well, the party in government has a majority in parliament, so they can just approve by themselves (and there is no history of members of the ruling party voting against any government measure).
Portugal new resident (the terms 'immigrant and expat' are heavily loaded, and make less and less sense in the context of movement within the EU) of some years.
AirBnB has wrecked city centres (Lisbon, Porto). Banning it, right now, is the only thing that will help. However AirBnB is putting money into the pockets of many Portuguese families who were lucky enough to own downtown properties (in what were previously undesirable locations e.g. by the river). Thus politically this may be difficult.
Much easier to blame golden visa holders (correctly - but a lower order cause), but also Digital Nomads and other foreign workers (not including the foreign workers from the former colonies who do all the grotty jobs of course - they don't mind them). Sadly this has crept into online and public discourse.
However Digital Nomads don't really earn that much in the grand scheme of things typically, and also tend to be paid from outside Portugal, tax breaks aside surely they are a net benefit.
What I read in RTE news made it sound like it was due to China relations, so naively I would imagine this could be US pressure more than EU. Also there is still an "entrepreneur" visa program still available I think.
The EU has been pushing countries to end their golden visa programs for years, because they're widely abused by money launderers and people avoiding sanctions.
It's too bad, because I'd love to retire to a sunny country in the Mediterranean, but by the time I retire I suspect golden visa programs will have gone, and there aren't really a lot of options for visas in retirement.
At least in the case of Portugal, the visa usually used by retired people is the D7 visa (not the golden visa), which requires a source of income not related to your work (eg: pensions). So you still have hope!
Perhaps they'll be replaced with visas that don't lead to citizenship, so you can still live there but not travel on a European passport.
It's tricky, because a lot of countries see "live here for a long enough time and of course you should become a citizen" as only fair. But it might keep everyone happy.
These programs should have been blocked by the EU before entering into force.
When you're part of a free-movement union, you shouldn't be allowed to create such programs without the consent of at least a majority of member states (maybe that did happen and I'm just ignorant to it), since otherwise you are unilaterally making immigration policy for the whole EU.
On the other hand, the free movement union might have taken significantly longer to establish if it started with "all citizenship and immigration laws are repealed and from now on all citizenship and immigration decisions are going to be made in the European Immigration Agency in Brussels". The EU started loose and aims for closer links over time.
Only a few thousand golden visas are issued every year. This is performative.
Portugal does have a housing crisis. The golden visa allows buying residential real estate as a qualifying “investment”. The government could simply end that part. Or even require building new affordable housing units.
Historic cities like Lisbon don’t lend themselves to new units easily, which is an issue.
Airbnb OTOH is cancer to housing markets and pretty much every government should kill it.
As someone who was considering this for the future (10+ years) its disappointing, but I understand it. Both Portugal and Ireland were on my list. I could 100% imagine how this program was ripe for abuse and would have side effects that citizens would not want. I suppose dual citizenship will have to come the old fashioned way!
I’m pretty sure Spain just started a golden visa program. These things probably move in cycles depending on the economic conditions and the governments.
If you’re really loaded, you can just buy your way into become a citizen of Malta an get your passport that way. I think Cyprus might also have a similar program:
Their program for Sephardic Jews was far more open to abuse than the golden visas ever were. From having looked into it, the wait times for appointments were insane. I can’t imagine having tried to do it.
In almost every other case I’ve seen (including Spain), the answer is yes, although often at a slightly reduced rate, and some also depend on how much time you spend there.
It's really sad to see some parts of Lisbon (not only in the city center) being completely taken over by airbnbs – often the whole building is owned by a company and then flats are rented out.
True, but on the other hand, I also remember how run down the historic center of lisbon was in 2008-2009. Airbnbs have improved the situation somewhat I feel.
Because no one had wanted to live in the city centre for decades. It was deserted and dangerous from the 90s until the tourism boom. The castle district, the epicentre of tourism in Lisbon, lost population every year for something like 30 consecutive years. Thankfully foreigners swooped in and ignored the dereliction and drug addicts for long enough to make the historic districts liveable again.
Doesn't look like it's passed yet, so probably nothing - but you can probably just go the D7 route if you've got the liquidity for the golden visa regime.
Do countries exist to enrich the members of government on the backs of the 90%? Do they owe some duty to protect the populace from massive global changes? Or will cynical, strip-it-for-parts policies continue to win the day?
Canada is a great example - lots of lovely policies, until you want to buy a condo.
Would putting a low price ceiling on airbnb listings do the trick? Let home owners rent out a room if they have the extra space or go on vacation, but not let them make any real profit on any substantial allocations of rooms or whatever.
It's not completely certain the golden visa program is closed (it has some other routes -- donation, fund investments, R&D investments, and it might also remain open for some commercial real estate options.). The citizenship pathway through that has been uncertain for a while; since the communist government got elected a few years ago, they started delaying processing on all immigration related stuff to the point where many question if it was intentional vs. incompetence, and the risk of not getting citizenship after 7 years is higher than ideal.
(The cool thing about the Portugal program was you only needed to be present 7 days/yr, which means you could retain residency somewhere else, e.g. Puerto Rico, during the 6 year wait for permanent residency or the 7 year wait for citizenship. Real estate also doesn't have FATCA reporting, and thus isn't restricted from US persons; the fund investments, etc. are more annoying. The 250k EUR donation route is not actually that horrible IFF the citizenship is certain, but it does not seem to be certain.)
Caribbean CBI is $100-200k but is faster (6-12mo, easy) and doesn't include right to reside in Europe, but it's just from a marketing/aesthetic/brand perspective worse than Portugal. Turkey is another option, although it's USD 400k RE investment now, vs. USD 250k, and Turkey's current politics are...spicy, although I'm pretty bullish on Turkey as a country in >10 years (and sooner if changes happen.)
This was my point. The Socialist Party in Portugal is a moderate social democratic party (while the "Social Democrats" there are a centrist party). There are communist/far-left parties/formations in Portugal, but they are not the gov't, and policy there is ... not communist.
This person is just drive-by shit talking his ideological biases
Singapore can fit 5.4 million people in 728 square kilometers.
Portugal has two times the population (10.4 million) and 125 times the space (92,200 square kilometers).
The problem isn't tourism (Airbnb) or retiree immigrants (golden visas) occupying Portugese residential units. The problem is inability to build the needed housing.
Singapore is benefiting from wealthy Chinese people leaving China, being a finance hub, and being a city state (small).
I can double an investment of 1€ easily; with 100 Million, it is a bit more difficult.
The problem is probably complex, and my bet is it has to do with incentives regarding tourism. When a desirable place gets an influx of people with a lot more purchase power than the locals, distortions happen. Prices, for instance, might reflect what tourists can pay, pricing out the locals. It is a delicate balance, and I guess it comes with globalization.
lol that's such an abuse of statistics that absolutely makes no sense
The problem in Portugal is the relation between income and housing cost. If the average rent of a 1 bedroom is 1000/month, and the average net income is 1300/month, you have a problem.
And oh boy are they building. Entire new zones that didn't even exist 20 years ago are now full of high rise buildings, public transport, shopping malls, ... But the prices to live there are phenomenal, even to western european standards.
Rent is solely a function of supply and demand. They're focusing on the demand side, by looking to limit Airbnbs and golden visa immigration, when they should be looking at the supply side, and how permitting delays and zoning restrictions prevent housing construction.
Not to disagree about the beauty in Portugal, but I visited Singapore as a young child, and it's so much nicer now because of the greenery they're adding within the city.
Also, at Singapore population density (I have different numbers from the other commenter), even if the entire EU moved there it would still be 42% untouched (and the rest of the EU would be empty).
I'll take literally any country in Europe, the Balkans (where I'm from, a tiny poor shithole for lack of a better word) included over S'pore any day of the week.
I lived there for a while, and I could go the rest of my life without ever even thinking of stepping foot into that depressing hole of a country again. These cute stats people like to throw around are nice and all in theory, but actually living there is a whole other story.
Maybe things have changed in the last 7 years since I last lived there, but I very much doubt it.
Things have only gotten worse. I left the island after more than 6 years there, moved to EU and couldn’t be happier. The stats vs the real life statement totally makes sense.
So the article is misleading at best. The Golden Visa isn't over. The real estate route for residential property investment is proposed to be axed. Nothing will be certain till March 16.
From a Portugal visa group I frequent (I'm looking at doing the golden visa in 2028 or so):
OK, so this article doesn't mention that these are proposals, which will be debated and then approved on March 16. I know the government has an absolute majority, but some changes may still happen. (One could reasonably infer from this article that it's a fait accompli.)
The article also only refers to a small part of a raft of proposed changes related to housing pressures, whose aim is to reduce the increasing unaffordability of housing, notably rental housing, for existing citizens/residents.
Many of the measures would not have a direct impact on members here, and available information is limited at the time of writing. However, key points (based on reliable Portuguese sources) include:
-Golden Visas - new GVs would not be issued in respect of property purchases, and conditions for renewal of existing GVs would be tightened (to be renewed only in the case of owner- or owners' children-occupied, or where rented on the long-term market).
-Alojamento Local - new AL licenses would not be issued, except in the rural interior where no urban pressures exist. Existing AL licenses would be re-evaluated in 2030, and every 5 years thereafter.
This is what I have been able to establish today on these points. There is no suggestion of retrospective action regarding existing approved GVs/AL licenses, until such time as they come up for renewal (or, in the case of AL licenses, are re-evaluated).
As a side note, GVs may still be available for investment in businesses and/or which lead to creation of jobs and/or in connection with some form of cultural sponsorship/investment, it seems - this is further outside of my field, so I can't say more on that point.
Finally. For many years, Lisbon and Porto have been rendered totally unaffordable for average local residents by rampant Airbnb fuelled property speculation and general overtourism.
And all of this under a supposedly left-wing government.
It's true that Airbnb is only part of the problem. A larger problem is that there is a lot of illegal temporary renting, in fact many people I know have never seen a rental contract. Officially, there needs to be a sign on the house for "alojamento local" but few places have it. I can't blame the apartment owners, if you have another place to stay just renting out one apartment is enough to make a living.
But the problem is even deeper, I recently spoke to a friend on the phone who considers to move to Portugal. He told me that if he rents out his apartment in L.A., he should get about 10,000 USD/mo for it. For that money he could literally rent a whole house in Portugal. How could Portuguese with an average salary below 1,000 USD compete with that on the housing market?
Precisely. People are struggling to internalize how much wealth inequality (both local and global) has shot up in recent years, and instead blame the symptoms of this inequality as if they're the cause.
The woes Portuguese people are feeling now have been felt by the citizens of many countries before. Most of Europe considers its "first world" status as some kind of inherent property. You just need to look outside of Europe to Asia and Africa to see what's going to happen.
In some countries, AirBnB is like "tax evasion as a service" so I'm not surprised that politicians choose them as their target. Also, people usually hate it if their neighbor starts inviting strangers every day, because it causes thrash and misbehaviour on a level that permanent residents wouldn't.
The slowness with which the biggest European cities with housing issues have tackled the problems of both short term rentals, second home ownerships and properties as investments tell you all you need to know about whose interests the main European parties are really serving.
On the other hand construction regulations should be removed and government intervention lowered down so the market can fill the gaps by building like crazy.
Seems like the era of these sort of visa schemes is ending and hand in hand the notion of luring foreign wealth being a good idea.
Not just Portugal but Ireland, and of course Canada ended its wealthy visa class (Quebec pausing theirs) and BC brought in its foreign buyer and empty homes taxes.
For a while there it was clear that policy makers seemed to think that foreigners buying real estate was somehow a quick and easy way to turn around the economy. Somehow thinking foreign wealth merely being around would induce more wealth to appear as if by magic.
1. bring in a bunch of wealthy people to buy real estate
2. ???
3. Tide lifts all boats and economy does great!
Unfortunately what actually seems to happen is that you end up with a bunch of mostly empty pied-a-terres, the rich foreigners leverage the opportunity purely for a passport and don't invest or start new businesses, and the home building industry pivots increasingly toward building turn key pied-a-terres that are useless and expensive for locals.
It all results in a situation that's worse for the economy, a spiking cost of housing and living.
What policy makers should really be striving for here is an extremely low cost of renting which keeps money in peoples pockets that they spend and invest in creating their own local busineses.
100% agree. The fact that giant majority of the last X years of economic progress have ended solely in the pockets of the landowners and landlords is a tragedy of our times.
Now I’m praying Australian states will do similar, but the political push-back on limits for AirBnB’s has been huge sadly, while rents skyrocket and house prices are beyond ridiculous.
If it's anything like my small Canadian province rents are astronomical for a small quite town. Often $1,200 for a one bedroom apartment. We're a tourist town and many homes have been bought up by people running short term rental or STR.
There was a town meeting and one owner of several buildings called in to complain that any regulation would hurt her business. She was calling while on vacation at Lake Como Italy. The sense of entitlement was thick.
Many so-called "reno-victions" are common. Oh that wall needs paint? Gotta evict you with 14 days notice. Good luck finding anywhere else to live since it's a 0.1% vacancy rate on a good day 0% most.
There's no damn breakfast either since there's no owner there it's just a way to get around paying the taxes that hotels do.
Would you be willing to expound on this? A friend lives in Sydney and they say the rents and house prices are very high. Is this a matter of excessive speculation, a lack of supply and no will to build, or a combination of factors?
Australians treat property as pension funds. Pretty much every middle class person will have an investment property or holiday house. Airbnbs are popular, less requirements (no tenant rights)/more flexibility from a land lords point of view while also significantly more rent. This removes stock from local workers in favour of tourists.
There’s some tax rules than incentivises investing in property, negative gearing, capital gains.
With Australians holding there wealth in property the government and their core voters don’t want to see property prices reduce,
Australia also has high immigration but not building despite population growth.
Due to it's climate, national parks and beaches, Sydney is one of the most desirable cities on the planet. As a result this has lead to sustained and very high (3% year on year) internal (rural/regional to city) and external migration.
In response to this migration, local governments close to the city center have done everything in their power for the last half century to oppose high density construction in any form, and to ensure that construction that does occur is not paired with adequate parks, walking/cycling routes, schools, transit, or external parking garages. Eastern suburb train stations in the 70's were protested and cancelled mid construction, and several new rail lines in the 80's and 90's have been cancelled due to thinly veiled race politics.
This has resulted in suburban sprawl and some of the worlds worst road congestion and gridlock that extends all the way to Sydney's periphery, and for 12+ hours per day during weekdays.
I’ll put it this way. 2 bedroom houses in inner city Brisbane (10km or so from the CBD) are $800,000 AUD or more. Further out Northside isn’t much better. A 2 bedroom cottage sold for $1.2 million in Ashgrove last weekend.
Property is the core investment most Australians make. So there’s zero political success in anything that would jeopardise house prices. See for example, the calls to sack the head of the RBA for raising rates “too quickly” (not quickly enough, and late).
There’s construction, of course, but it’s all either terribly built shoebox apartments that are still horribly expensive, in cities without the infrastructure to really make them work well, or luxury homes for those who had the good fortune to be born 20, 30, 40 years earlier than those trying to get a home now.
Add on top the fact we have frankly pretty bad renters rights, inflation plus rising rates and near zero vacancies plus profiteering have driven rents through the roof.
Negative gearing and other tax benefits distort the market further.
And because home owners are such a large and powerful proportion of the voting populace (which is the entire country as we have mandatory voting), and it’s an ageing population too so the young non-homeowners don’t outnumber them fully as a bloc, and you have political inaction as a near certainty.
It’s a recipe that’s been causing damage my entire life, but it’s not going to be solved anytime soon.
Why not keep the visa but let them build homes in economically depressed areas? The golden visa did have recent restrictions that are similar to what I am advocating for but they didn’t go far enough.
I think they actually did this a little while ago, changing the rules such that Golden Visa only applied to home buying in inland rural areas. No longer applying to the main coastal cities.
Hopefully a Portuguese person who knows more can chime in here because I'm not really that familiar with the issue beyond the high level.
> For a while there it was clear that policy makers seemed to think that foreigners buying real estate was somehow a quick and easy way to turn around the economy. Somehow thinking foreign wealth merely being around would induce more wealth to appear as if by magic.
No. These schemes were mostly pandering to certain communities for votes.
My impression was always that the main attraction of wealthy foreigners was the increased tax take. The higher rents could be solved by encouraging more housing construction, but why do that when you can just blame foreigners?
I can't speak for the situation in Portual as I don't live there, but the problem that I witnessed in Vancouver is that the type of housing that developers start building starts shifting to be explicitly catered toward a pied-à-terre product for a foreign audience. Eg. Vancouver developer Westbank was literally opening up sales offices for their condos in major cities in Asia.
I wouldn't be surprised if similar things were happening in Lisbon.
So while you're absolutely right the problems can be solved by encouraging more housing construction, the solution is eroded when the developers themselves don't play along and aren't building a product that is relevant to locals.
After Vancouver added its various speculation taxes, Westbank closed its sales offices abroad and even went so far to go back to the city and have them go through a re-rezoning of projects already approved to change them from luxury condos to purpose built rentals.
The wealthy foreigners usually dont actually live there so dont pay tax. Once you have a citizenship from Portugal/Malta/Cyprus you can live in any European country. Or commonly keep living in Africa/MiddleEast/Asia until the next coup or depression when you can move to your bolt hole.
I'm always amazed that people bringing in tons of money into your city is a problem, and the root cause is the people bringing in money... What the fuck is going on?
And it isn't spread around because the local government is incompetent. There are tons of other better solutions to manage the "too much income" problem.
The cities are fucked regardless with that level of incompetency.
Imagine your startup's problem is having too much money, and your CEO decides to fire the paying customers because it is too much money.
That's the problem though the people with golden visas usually aren't paying customers they're just rentiers who aren't contributing anything. The visas should be given to people who start companies and hire people and pay taxes, buying some real estate for a few years helps no one.
That exactly what the incompetent local government assumed as well. But those golden visa people don't live there, they just park money, maybe open an airbnb and operate it remotely, skirting taxes. So yes, taxing the sh*t out of airbnbs and empty property is one solution.
Because it shouldn't be a problem - but everyone wants to live in the best cities for cheap. What goes unsaid most of the time is that we should only be accommodating those who already live in said city (or, more hypocritically, the people who want to move into the city don't find it a problem when they move in, but do if its other people). Foreign immigration is an easy target, as are the wealthy.
The core of the issue is likely supply driven in most places - It makes no sense for an apartment that costs 300k to build to cost 500k-1m unless supply is constricted.
Residents would likely get pissed on newcomers pouring money into a city and driving prices up. I've seen a protest in Lisbon against tourists. It's true that aside foreigners on golden visas it also attracts a less desirable form of tourism: cruise ships.
Also tourist jobs are, by definition, almost always low income, because they are collecting bits of people’s vacation budget. There’s nothing more than the bottom rung there, unlike other economic development strategies.
There are ways to design the program to minimize the kind of problem you describe. Vanuatu give passports in return for a donation to some government owned fund.
Not a lot of real clear data on this so it's always up for debate.
I can't speak for the situation in Portugal as I don't live there. Maybe they have heaps of data, but when British Columbia was wrestling with a feeling that foreign buying was impacting the market, they literally were not collecting any data and so had nothing beyond vibes and anecdotes to go on.
The impact of foreign buyers was seemingly enough though for a major developer in Vancouver, Westbank, to start opening up sales offices in major Asian cities and was explicitly citing its condos as being ideal as pied-à-terres in their marketing materials. With that in mind, if entire major developers are shifting their entire business model, I have to imagine that the foreign buyer market was real and substantial.
All the wealthy influencers who moved to Portugal, and sell content around “escaping america to live the american dream” - great work. I’m sure the locals all appreciate and love you.
The number of Americans residing in Portugal is at its highest level in more than a decade, according to agency data. There were about 7,000 Americans living in the country at the end of 2021, more than double three years earlier.
Sincere question: Does anyone know how to differentiate between rise in real estate caused by a couple thousand Americans in a country of millions and the general inflation and rise in real estate being felt everywhere? I'm not fully convinced that a few thousand foreigners "ruined" Portugal, CDMX, and other such places. This seems more like a classic case of blame the foreigners, not our policies nationalism. The average digital nomad cannot afford to buy houses for cash in Europe.
Real estate is priced at the margins, because it's rather illiquid. Here's an estimate, there are about 10M people living in Portugal, maybe 5M living in areas (cities, coasts) where wealthy foreigners might want to settle. Average 3 people per household, that's 1.6M homes. Housing vacancy rates in desirable areas are usually 1-3%, so maybe 15-45k available homes at any given time in desirable areas. An influx of a few thousand extra wealthy people (say 3-5k, not just Americans) in a short period of time could certainly have an impact on current vacant housing prices, which might last a good number of years (prices tend to go up quickly, and down slowly).
The big blind spot is urbanization, which is ongoing. Internal migration is the vast majority of the numbers.
Of course they are less wealthy - almost by definition - than the foreigners who take a lot of apartments.
I don't particularly care about Airbnbs, but the general problem of underbuilding (in cities proper) is enormous and most people don't even acknowledge it. :|
A much more significant causal factor is probably the aggressive devaluation of other monetized (in the sense of serving-as-(ersatz-)money) assets like equities and national currencies. Real estate is one of the only good investments when governments are doing crazy stuff like shutting down the economy and writing big checks to stay at home.
Presumably demand also has some elasticity. There may be a set number of bedrooms, but if prices go up enough, more people make roommates work, forgo the guest bedroom, or sleep more children to a room.
This is a real factor, and it’s good that it prevents people from ending up homeless. However, making lifestyle changes like this definitely stings hard enough to make people angry at the foreigners.
> caused by a couple thousand Americans in a country of millions
Chinese nationals account for half of all golden visas issued in Portugal. It is the same capital outflow that is ruining real estate markets worldwide.
That article also says the total number of residency permits issued under the program was 11,628. The idea that 12k foreigners have caused (or even significantly contributed to) Portugal's housing unaffordability doesn't really pass the smell test.
Picking on the portion of those that went to Chinese nationals is just an irrelevant detail.
It’s pretty easy. Short term rentals and big money rentals displace limited inventory and drive markets up.
It’s a phenomenon seen time and time again with AirBnb and to be honest is the way the US government eliminated SROs and tenaments without windows etc. Section 8 vouchers drove up rents for conformant apartments.
The decrease in the typical duration of tourists' stays in Portugal, which has gone from 6.7 days to 4 days in the past decade, is likely to affect various aspects of the country's tourism infrastructure, including its airports. Additionally, there has been a problem with noise pollution in residential areas due to touristic establishments like bars and nightclubs.
I would imagine via AirBnB or short term rentals in general. Last time I stayed in Lisbon I stayed in a converted apartment, via AirBnB. It certainly puts pressure on the long term rental market.
I also have a sneaky suspicion that some/perhaps many Portuguese are actually doing pretty well, and are thus collectively suffering the same 'affluenza', stoked by zero interest rates, as the rest of us.
I would imagine by residing they are only counting people who are renting long term. Then there are also those who stay for few months which would mean lot of AirBnB or similar rentals. That would outprice locals.
> by a couple thousand Americans [...] I'm not fully convinced that a few thousand foreigners "ruined" Portugal
Me neither.
However, There's probably a lot more EU residents living part-time in Portugal than there are Americans. This most likely has a much bigger influence than a few American expats.
Let's also remember that Portugal (and Spain) were dictatorships not that long ago which would have severely crippled foreign investments. Their economies are nowhere where they would be had they been stable democracies but are on the right direction playing catch-up with the rest of Europe. Poland and Romania are on a similar trajectory after having their development and growth stunted by decades of communism.
Moving somewhere permanently without any local friends or family is a horrible idea for most people. It’s a fantasy.
Edit: Since I’m already being rate limited because I’m on dangs list because I argued with him…
It’s not easy for everyone to find new friends and romantic partners. Please don’t brush off the harsh realities of immigrating. My immigrant friends all tell me how hard it was to move to the US.
If you're mostly self reliant where you live today and the climate sucks then it can work out just fine, especially if you are willing to really learn the local language.
Yes, only if one is in an good economy country (or first world country). Otherwise, economic migrations happen all the time, and I myself moved multiple times in life (temporary) for better job prospects and permanently for personal reasons to other countries, with not a known single soul in new place.
It really depends on where you move. I would never move to suburban America, for example, because of what you mentioned. But if you're young(ish) and/or don't have too many family commitments it's pretty easy to find a hobby based or cultural community in most cities.
Your immigrant friends might say its hard but they still choose it over staying at home. I'm an immigrant, I've lived in 5 countries, it was pretty easy to make friends in all those places, though they were big global multi cultural cities.
I don’t think it’s fair to compare a country to cities. Lisbon GDP/capita is almost $40k.
And to clarify, Beijing and Shanghai are not provinces, they are cities. They are two of the four mainland Chinese cities “promoted” to the province level politically, but they are cities. Basically it would be as if Washington DC was a state. The other two cities like this are Chongqing and Tianjin.
Portugal was one of the poorest nations in the world in the early 20th century. A poor, backwards region in a more prosperous country was called “The Portugal of <country name>.”
Portugal got out of its funk when a vaguely fascist dictator took over. Salazar.
He sacrificed prosperity and liberty to achieve stability, which was a good deal because Portugal didn’t have much prosperity or liberty.
The last of Portugals overseas (non-Atlantic) territory’s was ceded to China in 2000.
It’s been a long, strange trip for Portugal, but they haven’t been a wealthy empire since they gifted Mumbai to the British.
The Portuguese owned it for what, 500 years? At what point does something become someone else's? Modern China was created through invasion and bloodshed by various political groups just like every single country in the world.
I wonder the same. There doesn't seem to be as much controversy in areas where a historical owner ceded the land through a 'fairer' conflict (by that I mean each side had resources and technology that was comparable).
Perhaps there's a sense that land claimed through overwhelming advantage was not a fair fight and thus any gains should be returned?
I believe that’s how people perceive it. The imbalance of power and the sense of injustice. But a lot of times those people conquered by the more powerful group just committed an atrocity to get that land. But it was more evenly matched? It’s bizarre.
History is a series of brutal, often genocidal, wars.
All of them sucked, for someone or another, but ended up making us who we are, today, for better or worse.
In the US, we celebrate the War of Independence (American Revolution), where we threw off the yoke of British tyranny.
But there are some black folks, and native Americans, that maybe didn't get too much benefit from the war.
The Romans probably did more for diversifying the genetics and cultures of Europe and Western Asia, than anyone, from their brutality. The Chinese feudal system was so vicious, that it made the European one look like a day at Disneyland, but they also developed some important technological advancements.
The Aztecs and Incas were ... not exactly gentle ... to their neighbors, but established some pretty significant civilizations (that the Spanish then took apart). They didn't even have horses.
We have flamenco music, because the Moors conquered Spain.
... and so on ...
I'm really hoping that we may finally be seeing an end to one nation just reaching out and grabbing another one. Ukraine may be the last gasp of that. It may not be the end, however, of nations splitting into smaller ones.
If you go that route, there's a few colonized area within China itself, Macao has been longer ruled by the Portuguese than Tibet has been ruled by China
Well, it depends what you mean by “China” doesn’t it? The People’s Republic of China isn’t the same thing as the Ming Dynasty. There’s no law of nature that dictates that a government in Beijing must also govern Macau, which is pretty far away. (Beijing to Macau is farther than Portugal to Amsterdam.)
That's a form of the resource curse. Portuguese economy relied heavily on exploiting the colonies. They then used the wealth they acquired to purchase foreign goods. Their domestic economy didn't develop properly, as exploitation and trade were more lucrative. That became a major issue once industrialization moved the focus of economy away from primary production.
Indeed. And now they have a new resource curse - tourism. Like mining, tourism benefits wealth holders (hotel owners etc) much more than wealth creators (the people cooking the food, making the beds). Not many jobs in the tourism sector are high skilled / high paid, and too much of it crowds everything else out.
I'm sure 'Big Capital' would want you to think that!
But more seriously, (good) human activity creates wealth - wealth being 'a better world' or 'nice things' or 'human happiness' or 'peace' or 'more toys' or the many other ways of understanding it.
Capital is an agglomeration of wealth employed to create more wealth - however without human activity and human direction it can do nothing, instead it amplifies such activity and direction. Furthermore, as society moves to post-industrialisation, the most important wealth creation will require much less capital investment, and much more human effectiveness.
In a capitalist society, wealth holders are trusted to direct capital more nimbly and effectively (for ~50% of the economy in modern economies) than the state. As such, they can be understood as creating wealth too. However, it is a simple matter for them to delegate to wealth managers, while creaming off an over-sized share of the proceeds. The trick then is to replace wealth holders with commonly beneficial capital ownership vehicles - i.e. pensions and sovereign wealth funds, while keeping a lid on the wilder excesses of the appointed wealth managers.
Does it really matter if it is golden visa or any other visa? at the end of the day increasing the population cause increase in house prices, it happens everywhere. Maybe countries should learn from Japan, the only sane country which doesn't push for population growth by immigration or any other means. It is no surprise that house prices there are reasonable, even in major cities like Tokyo. It is easier to just stop population growth rather than increasing the rate of building new houses and infrastructure, at least in the developed world where there is so much regulations and barriers.
I couldn't find a primary source but all sources say the same as this one: https://www.imidaily.com/datacenter/portugal-data/
The program lets in on the order of a few thousand people per year.
Other visa programs there vastly outstrip this is number.
The golden visa is just a great marketing term for political ire. It implies wealthy privilege so it's easily targeted.
Of course, the reality of things is that Portugal has recently rightly earned a reputation for being a great place to live and people (not many of them super rich) decided to live there. Housing is being built to compensate.
The airbnb thing is more interesting and nuanced but harder to get a handle on. It might be that airbnb is causing some unhealthy things in the real estate market.