Spain and Portugal Golden Visas offer the opportunity to gain the right to residence in an EU country with visa free travel to the rest of the EU. The most popular option is investment in real estate. The rules in Portugal changed in January 2022 so which is the most attractive option and are there other options to gain residence in Spain or Portugal?
As is so often the case the most attractive option is in the eye of the beholder. Spain and Portugal both offer an enjoyable lifestyle in the sun, a fairly low cost of living and excellent property to invest and/or live in. The question is, however, what you are looking for from a Golden Visa?
Both offer the opportunity to invest in property, shares or other instruments to gain the right to residence in the country. In both countries investment in property is by far the most popular option with the basic investment required in property standing at €500,000. The main difference, however, is that Portugal offer lower cost options if you invest in urban regeneration areas, older properties or in low density areas. However, following changes in the rules in Portugal from the beginning of 2022 there are severe restrictions on the areas that qualify in Portugal whereas there are no such restrictions in Spain.
Here is a summary of the key differences between the two schemes:
There have been 5,557 Golden Visas issued in Spain between 2016 and 2020 and 6,601 in Portugal over the same period. In 2021 Spain saw a reduction as Covid hit whereas in Portugal the numbers stayed higher as people sought to apply before the changes came into effect at the end of the year.
The Golden Visa gives you the right to spend as much time as you want in Spain or Portugal but you do not have to live their full time. This is especially attractive in the context of the Schengen Visa where non-EU citizens are restricted to 90 in 180 days when visiting Spain or Portugal. With the Golden Visa you only have to meet the minimum requirement for spending time in the country (one day for Spain, one week for Portugal), but can live there full-time of you wish. Thus a Golden Visa allows you to spend as much time as you want allowing you to plan your visits without having to comply with the 90 in 180 days rule.
The key issue here becomes tax residence. If you spend 183 days or more in the country you will become tax resident and therefore liable to tax on your worldwide income. Thus in practical terms if you do not want to become tax resident the Golden Visa changes the 90 in 180 days restriction to 182 in 365 days.
For those with significant investments tax residence can be a significant consideration, particularly in Spain where there is a wealth tax. The advantage for Portugal is the Non Habitual Residence Scheme which gives you significant reductions in tax on foreign sourced income. Professional advice is clearly important to assess the specifics of your personal position.
You therefore need to be clear about your reason for choosing a Golden Visa. If you plan to spend part of the time in Spain or Portugal in attractive coastal resort areas but to stay under 183 days then the key issues are likely to be the location with Spain holding the advantage as it offers complete flexibility on where you choose to buy the property.
If you plan to live full time in the country then the Golden Visa may not be the best option for you. Both countries offer a visa that does not require an investment in property provided you can demonstrate that you have the means to support yourself and any dependents financially without working in the country. This is the Non Lucrative Visa in Spain and the D7 or Passive Income Visa in Portugal. The requirements in Spain are far more demanding requiring €27,792.96 annually for the main applicant (plus €6.948.24 for each dependent) against Portugal’s requirements of €8,460 for the main applicant (plus €4,230 for the spouse or parent and €2,538 for each child).
In Spain the visa does not allow you to work or carry on business in Spain for the first year, although you can convert to allow you to work or set up a business after one year. In Portugal you are not restricted from working in the country.
The NLV and D7 therefore offer similar benefits to Spain and Portugal Golden Visas of being able to live in Spain or Portugal but leave you free to decide whether to rent or buy your home at the price you choose. However, for both you have to become tax resident and so is only an option if you plan to spend more than half the year there and are happy to be taxed in the country on your worldwide income.
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