1. What is a low-density area of Portugal?
Low density areas are defined as areas with less than 100 inhabitants per square km and the GDP per capita is less than 75% of Portugal’s average.
The Portugal Golden Visa scheme offers several different investment options as a route to residency. The most affordable of these is the €280K low-density real estate investment option. It is similar to the €350K property renovation investment option, but the lower financial requirements make it a very attractive option for those with more flexibility about location.
Since its implementation in 2012, the Golden Visa program has flourished in the cities of Lisbon and Porto. The investments have created a ripple effect in economic growth for the country.
The changes to the Golden Visa program that will come into effect in January 1st, 2022 will allow purchasing properties in Portugal only in the low-density and less populated areas.
The changes and specifically the €280K low-density amendment of the program aims to redirect, encourage and diversify more investment into lesser-known areas in the interior of Portugal where there is a considerable amount of property that requires renovation. These inland areas are less populated but still very attractive to tourists for their historic and cultural values, as well as natural beauty. It is hoped that the changed rules will boost this redevelopment process and open up the rural areas of Portugal for residents and tourists alike.
Nearly all the interior regions of Portugal are categorised as Golden Visa low-density areas and offer beauty, diversity, and culture.
The capital city of Lisbon, major cities like Porto, most of Portuguese mainland coastal parishes south of the River Lima and north of the River Sado (with some exceptions in the districts of Setúbal, Beja and Faro) and the islands of Azores and Madeira are excluded from the low-density areas.
Mainland Portugal is divided in 18 districts, each district is divided in multiple municipalities and each municipality is divided in multiple civil parishes. There are a total of 165 counties and 74 parishes considered low-density.
There are many reasons that make investing in one of Portugal’s Golden Visa eligible low-density regions an attractive option that is well worth considering as an alternative to the current most popular property investment locations like the capital city of Lisbon, major cities like Porto or the coastal areas of Algarve.
Some of the key benefits of the Portugal's low-density areas are:
Many of the Portugal Golden Visa inland areas are off the tourist map and as such might be more suited to people wanting to retire and live in Portugal rather than invest in a property for rental income. However, there are some Portugal low-density municipalities, counties and parishes that are deservedly popular with tourists and so would represent a fantastic investment. Three are particularly worth mentioning.
The Peneda Geres region is home to Portugal’s first and only national park, the Peneda-Gerês National Park. Popular with hikers and tourists seeking awe-inspiring scenery and a real sense of being away from it all, the low cost of property here offers excellent returns on holiday rental investments. €280,000 EUR will buy you a 160 square metre property in good condition which could be split into smaller units to further enhance the investment potential.
Located on the northern border of Portugal, it is only about 1 hour away from Porto’s airport, 40 minutes away from the ocean, and another 1 hour away from Vigo, in Spain. Filled with stunning waterfalls and lakes, dense forests, and wild horses running free, this is still one hidden gem, even for some Portuguese people.
The Douro Valley is famed the world over for the breath-taking beauty of its river valley and vineyards. It has become a popular tourist area, especially for those who enjoy wine tasting, walking and water sports. However, it is not only the wine that is special here. The carved hills, the historical villages, the comfort food, the world recognized foot trails, the sights, and overall culture, are just unforgettable.
In this area, a 120 square metre house in need of some renovation could be bought for €280,000 EUR. A holiday rental would give you a solid return on your investment here.
Surprisingly, certain parts of the Algarve are now categorised as low-density areas. A long-time favourite for European ex-pats, this world-famous holiday destination has beautiful beaches and great year-round weather. Investing in a property in the Algarve could deliver amazing returns, as it is popular with families and sun-worshippers alike. One such area is the region around the town of Aljezur. Enclosed by the sea on one side and the mountains on the other, this area offers stunning views and a surprising amount of peace and quiet. Houses here are typically single-story and a 160 square metre property could still be bought for €280,000 EUR.
The low-density interior regions of Portugal offer a glimpse into a traditional way of life which both expats and tourists alike find charming. In addition to the three areas already mentioned, three others are worth highlighting:
Low density areas are defined as areas with less than 100 inhabitants per square km and the GDP per capita is less than 75% of Portugal’s average.
The changes being introduced to the Golden Visa program mean that property investments in Porto, Lisbon and other high density urban areas on the coast will no longer qualify under the Portugal Golden Visa scheme starting 1st of January, 2022. However, the reduced real estate investment options - purchasing property worth of €280K (reduced from 350K) or €400K (reduced from €500K) in low-density areas will still qualify as a route to residency.
Yes! Buying real estate in low-density regions is a major trend among local and Euopean investors. The markets are still extremely cheap compared to the big cities in Portugal or other European countries. At the same time the demand for short term rentals increased strongly in the last three years. This led to good and steady value appreciation growth rates of around 5-7% which is forecasted to pick up in the next years.