Brexit and real estate in Portugal
Published on 20th June, 2017 by
One year on from the referendum and PortugalProperty.com were pleased to be able to discuss Brexit with Edge International Lawyers. With 30 years’ experience in foreign investments, they were in a good position to discuss Brexit and the real estate market in Portugal.
Whilst there promises to be plenty more debate as the UK navigates its way out of the EU. Brexit will produce effects, not just for British citizens but across the EU and globally.
Portugal is a prime investment location and considered to be one of the best places to retire. This has led to new property developments and a surge in tourism levels. The Portuguese government realised that they needed to focus on investment programmes such as the NHR (Non Habitual Residency Scheme) offering generous tax concessions, the Golden Visa Scheme where over 5,000 visas have been issued since its inception in 2012, Urban Rehabilitation with special tax regimes to incentivise regeneration and Start Ups with the creation of more than 37,000 new companies last year alone.
British expats have made their home in Portugal since the 1960’s and the Anglo-Portuguese Alliance is the oldest in the world (Treaty of Windsor in 1386) and even a so called ‘hard Brexit’ would not halt current double taxation relations which have been in place since 1968. Many potential real estate investors ask about the practicalities of healthcare and bank accounts and it is likely the availability of healthcare to UK citizens will remain for those already in the system, but this will not necessarily be the case for those arriving post Brexit. Bank accounts will be regulated according to the same principles as for non-EU nationals.
But what about the practicalities for probate matters? The UK has opted out of the EU Succession Regulation (“Brussels IV”) but Portugal applies the regulation. It is possible to elect your law of nationality as succession law. This means that UK rules of succession apply to UK nationals who own property in Portugal, and should a ‘hard Brexit’ happen, the UK would have to fall back on the World Trade Organisation and trade solely under rules set by the WTO which governs things like tariffs and quotas.
There are various residency scenarios; such as a bilateral agreement reached between the two countries with no visa required, one could obtain a Permanent Residency Visa through a 5 year period further to obtaining a Certificate if Registration of European Union Citizen (to be used in the EU) obtain a retirement visa, which is a relatively simple process, or acquire (after 6 years in Portugal) Portuguese Nationality. Not forgetting that spouses of EU citizens are entitled to residency in Portugal.
One thing to note, there has been a spike in real estate in Portugal post the Brexit announcement and the Portuguese government see it as an opportunity.
At the moment we can only speculate about exactly what will happen, but the knowledgeable team here at PortugalProperty.com can show you a great selection of properties right now!