Foreigners Spend Twice the Money on a Lisbon Home Than Locals
(Bloomberg) -- It seems nothing can stop overseas investors from snapping up prime Portuguese property. In fact, they’re willing to pay more than double for a Lisbon home than domestic buyers.
Foreigners paid a median price of 4,283 euros ($4,599) per square meter of Lisbon property in the three months through December, compared with 1,858 euros for locals, according to the country’s National Statistics Institute.
Demand from abroad has helped bolster real estate prices in the city by 11.4% in the same period, the institute said in a report released Thursday. Surging sales have created a problem for many locals, who are being forced to look elsewhere for a home.
The Portuguese capital has become a magnet for international property investors, attracted by the city’s mild temperatures and tax incentives. The pandemic accelerated that trend, with legions of remote workers descending on Lisbon in recent years.
Portugal offers some foreigners a flat 20% tax on their income or a flat 10% tax on their pensions. The country also doesn’t tax crypto gains. The number of foreign residents living in Portugal rose 40% over the past decade to 555,299 people, according to the statistics institute.
To try to regulate demand, Portugal’s government began restricting its so-called golden visa program to property purchases outside Lisbon and the northern city of Oporto. The program grants foreign nationals a residency permit in exchange for a real estate investment.
“It’s evident that most foreign buyers have deeper pockets and can afford to buy prime real estate in the city center,” said Antonio Machado, general secretary of the Association for Lisbon Tenants. “The problem is that most foreigners don’t pay the same amount of taxes that most Portuguese have to pay, which is unfair.”
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