Low density regions
The Portuguese Golden Visa Program for residence by investment is considered one of the best in the world. The best choice is the most economic option, the 280k investment. The 280k investment comprises the rehabilitation of real estate in low-density areas. In this article, we will introduce you to the definition of low-density areas in Portugal as well as the best regions for investing for the golden visa program. Please contact us if you have any questions about the low-density areas or the program itself!
What are low-density areas in Portugal?
Low-density areas are determined by the so-called NUTS 3 regions. It defines them as areas which have less than 100 inhabitants per km2 or a GDP per capita of less than 75% of the national average.
Low-density areas are not the same as interior regions, which are valid from 2022 on.
The definition of low density applies basically to all inland regions of Portugal and some coastal areas (Silvercoast & West Algarve). These areas change constantly and must be checked at SEF every 6 months. The inland regions eligible for Golden Visa in Portugal are defined in Portaria nº 208/2017 July 13, and determine the type of investment to be made: residential or non-residential.
How does the 280k investment option work?
The Golden Visa Portugal 280k investment option is called restoration and renovation, both as a real estate investment option and in practical terms.
Why? Because though similar to the 350k investment option, it has a 20% reduction for investments in low-density regions, and these regions can benefit from urban and social development.
Applicable standards
- Your property must be located in one of Portugal’s designated low-density areas.
- The property construction has to date back to at least 30 years ago, and/or need renovation work.
- The combined total sum of the renovation work and the value of the property must amount to at least 280,000 euros.
- You must provide documentation proving ownership of the property. Besides that, other documents are also needed:
- evidence of application to relevant authorities for permission to carry out rehabilitation work;
- evidence of planning permission;
- proof that you signed a contract to carry out the rehabilitation work.
- In addition, you must deposit the difference between the purchase price of the property and the minimum renovation investment, in a Portuguese bank account registered in your name.
- In the last opinion issued by the SEF, you should request a declaration from the City Council where the property is located, stating that it’s located in a low-density area (NUTSIII) for Gold Visa purposes.
- This should be done by your lawyer during the due diligence process on the property.
WHY IS THE 280K OPTION EXCELLENT FOR INVESTING?
Attractive investment areas
- Many are considered low-density such as the Southwest of Algarve, Costa Vicentina or Comporta.
- They represent a smaller investment, which you need for Golden Visa.
- In these areas, you can buy properties with 2-3 units for a lower price per m2.
Profit
- The return on tourism investment is significant. One unit can provide 12,000 euros of profit per year.
- Prices grow at least 5% per year in low-density areas. With the new laws, they will rise even more.
- Low-density areas are premium grounds to invest. They are perfect to develop eco-tourism, wellness, innovation, corporate offerings and luxury projects.
Investing in the Algarve
While ARI (Autorizações de Residência para Investimento) licenses have been suspended in Porto, Lisbon and the general coast, there are still quite some municipalities in the Algarve that you can still invest in. Either for residence, commercial or touristic purposes.
It can even be more beneficial for you – not only because of the 20% discount in investment in the low-density areas, but because this is a perfect area for expats. There’s a big immigrant community and it’s not too busy (especially in fall and winter). It’s especially a great option for retiring or buying a vacation house.
If you don’t plan on living in it year-round, you can rent it during the time that you’re not there, also.
What are some of the best low-density municipalities to invest in real estate?
For those who wish to invest in low-density areas, these are some of the best regions: Alentejo, Douro Valley, and Algarve.
What do they have in common?
They all offer low and competitive prices, ideal if you wish to retire or invest in tourism.
A great part of the real estate growth and investment around here can be explained by analyzing tourist behavior. For example, during the pandemic, we registered more corporate bookings of businesspeople working remotely. This means there are some who prefer to work from Portugal for a few months, given our great quality of life.
Algarve
- For most investors, it is a dream come true. Several areas in Algarve are now suitable for low-density routes: Castro Marim, Vila do Bispo, Monchique, Alcoutim, and Aljezur, even some parishes of Loulé and Tavira.
- Algarve is Portugal’s most popular region among European expatriates. Either in the summer or winter, it has tremendous tourism growth.
- You can invest in a vacation home or use the highly profitable opportunity that touristic accommodations represent.
Douro Valley
- Classified as World Heritage Site by UNESCO, the region is one of the most acclaimed areas in the world.
- The breathtaking valleys and renowned wines are profound reasons why many travel to the Douro Valley.
- You can enjoy the full beauty of the river, by going around it by train. Or enjoy a ride on one of the numerous cruises. Excursions in the Douro region include high-quality cuisine, wines, and nature.
- Some low-density areas to get to know around here are Alijó, Mesão Frio and São João da Pesqueira.
- Country houses overlooking the river or wine-focused properties are always good investments in this valley, guaranteeing a high-profit margin and good times.
ALJEZUR
- Aljezur is widely known for being surrounded by the sea and the hills of the Costa Vicentina. Between the regions of Alentejo and Algarve, its cliffs are considered idyllic locations for the breathtaking views.
- The amazing beaches here (Arrifana, Amoreira, and Bordeira) are sought after by surfers from all over the world.
- The houses show traces of local architecture: the first floor with walls covered with adobo which is very good for thermal insulation; the houses are large with great sun exposure, gardens, and fireplaces.
ALCÁCER DO SAL
- In the South of Lisbon lies one of the main real estate growth markets in Portugal. The region is called Comporta and is the investment target of most international buyers.
- Comporta’s famous for its fantastic beach and nature. It’s considered premium land, very limited. Bordering Tróia peninsula, a sought-after vacation spot in itself, only adds to its charm.
- In Comporta, a house can easily reach 1,000,000 Euros or more. Located in the district of Alcácer do Sal, it’s 20 minutes away from the beach of Comporta, right on the bank of a beautiful river.
- Considered a low density area and being close to cities like Lisbon or Setúbal, it’s more than worth the investment.
ÉVORA
- The southern of Portugal hides away several historic and quiet cities such as Évora. The city is known for its famous and well-preserved Roman temple, the Temple of Diana.
- Though a bit far away from the biggest cities, the University of Évora – one of the biggest public universities in Portugal – attracts a lot of students from surrounding districts.
- With more people looking to stay in Évora, there’s a growth in searches for accommodation, which boosts the real estate market. It’s a great investment if you’re looking to buy and rent your property.
SERRA DA ESTRELA
- A famous destination for winter sports, this is the highest mountain in mainland Portugal.
- The unique rock formations, natural habitat, and high-quality regional products are some of the factors that make it perfect for investment.
- With such a great location and several villages scattered around the mountain, it has become quite sought after for the nature trails and rural experience.
- A lot of people acquire rural houses to use for a season and rent them for the rest of the year. This represents quite the investment since more people look forward to having some quiet time away from big cities.
MIRANDA DO DOURO
- Miranda do the Douro is a city in the district of Bragança, northeastern Portugal.
- Right by the border with Spain, it is bathed by the Douro river and surrounded by the magnificent landscapes of the International Douro Natural Park.
- The city receives around 120 000 visitors per year, most of them Spaniards, due to its proximity to Spain. That’s why it made a great investment in urban regeneration, in tourism, and commerce.
List of Low density regions
municipalities
Parishes
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