Portugal update - how is the market performing post-Covid and post-Brexit?

Portugal has long been a favourite destination for British holidaymakers and investors, but getting there, living there and investing there have no doubt become more difficult in recent years due to the combination of Brexit and Covid-19.

However, with the worst days of the pandemic seemingly behind us and more time to adjust to the post-Brexit landscape, how is the market performing now?

“The way in which Portugal has successfully navigated the last 2-plus years and continued to attract widespread investment both in property, tourism, as well across its vibrant start-up scene is testament to the extraordinary resilience of both the Portuguese people but also the government initiatives to attract overseas investment," Chitra Stern, owner, founding board member and CEO at Lisbon-based Martinhal Family Hotel & Resorts, said.

"Last month registered one of the most compelling trends to-date with the largest number of Golden Visa applicants coming from the US (second only to China). This was also echoed in figures for the first quarter of 2022, with investments from the USA tripling on the same quarter last year."

She added: "We know from the figures that most property investors also intend to bring family members, with over half registering more than one family member, too. Over 80% of visas granted last month were for property investment and of these, close to half were for properties exceeding the £500,000 mark."

Stern said the British still constitute the second biggest group of foreigners (after Brazilians) residing in Portugal. "Increasingly and from our own experience, this demographic is changing and it’s very much a mix of families, entrepreneurs and those wanting the enviable lifestyle switch-up that the country offers," she said. 

"Post-Brexit, the Golden Visa investment is available to British buyers seeking residence in the EU. However, many are opting for for the Non-Habitual Residency Visa, which offers very attractive tax relief on foreign income." 

Stern went on: "A set of changes to the Golden Visa, which came into effect in January this year, placed restrictions of property asset type and geography, as a way to encourage more investment in lesser populated areas. However, for Martinhal, we are in the very fortunate position that our sales portfolio still qualifies for Golden Visa due to the commercial nature of hotel properties." 

"For Martinhal Residences, now close to 90% sold, buyers still have the opportunity to buy prime real estate in the heart of Lisbon to live in but avail of the benefits of the Golden Visa due to our touristic license." 

She concluded: "Our flagship project in Sagres in one of the most idyllic spots of the Algarve in the Vila da Bispo region which is still classified as a low density region, and there we have a select few properties for sale from €450,000 which are eligible for the Golden Visa scheme and have a fixed rental return as well.”