Raquel Albuquerque Journalist Study identifies effect of gold visas on more expensive properties. After the program came into force, there was an increase of 60% of houses sold for 500 thousand euros Gold visas were one of the factors that contributed to the increase in house prices in Portugal, concludes a scientific article published by the Institute of Labor Economics in Germany and released by the European Fiscal Observatory. Following the entry into force of this scheme, which allowed residence visas to be issued to those who bought a house for a minimum of EUR 500,000, and compared to the previous period, there was an increase of 60% in properties sold for precisely that amount, suggesting that there was a distortion of prices in order for houses to be covered by the program. "We conclude, firstly, that the gold visas affected the prices of houses transacted in the vicinity of half a million euros, not only because they led to an increase in demand from foreigners outside the European Union, who benefited from the visa, but also because there was an overreaction by Portuguese consumers and sellers," explains João Pereira dos Santos, one of the authors of the article, a researcher at Queen Mary University of London and a professor at ISEG. In addition to the fact that foreign investors ended up paying more for the houses than they would have before the program, Portuguese buyers were also dragged down by the change. "Even though they didn't directly benefit from not needing a visa, they incorporated the information that there had been a big increase in demand into their purchasing decision, giving exaggerated importance to the EUR500,000 figure," says the author. The analysis was based on cross-referencing data from the IMT (the tax paid whenever a property is bought) and the IMI (Municipal Property Tax, which gives a measure of the quality of the house through its tax value). The researchers focused on the period between 2010 (before the gold visas came into force in 2012) and 2019, to eliminate the after-effects of the crisis and the pandemic. In almost ten years, the scheme had 12,000 applications and generated €7 billion, which proves the attraction of foreign investment, although it "brought other consequences", say the authors. "People started buying houses for €500,000 with poorer quality than before." "Gold visas were not the only variable contributing to the increase in house prices. But it is confirmed that they were one of them," says João Pereira dos Santos Asked whether there was a contagion effect on properties below this EUR500,000 threshold, the researcher stresses that the analysis only allows us to see this effect in houses that, "in the absence of the regime, could have been sold, on average, for 475, 480, 490 thousand euros". However, he admits, "as time went by, there was a contagion towards the lower values, exacerbated by the fact that there is little construction and what there is is aimed at the higher end." João Pereira dos Santos stresses that gold visas "were not the only variable contributing to the increase in house prices", referring to other factors such as local accommodation, the opening of new hotels or the non-habitual resident regime. "The increase in tourism and immigration has inflated demand. But what our research confirms is that the gold visa regime has contributed and is one of those factors." More data is lacking A study commissioned by the previous government, carried out by a working group made up of various ministries, and reported by Rádio Renascença a year ago, also concluded that gold visas "promoted" the rise in house prices "in the areas of greatest pressure". In July 2023, Parliament approved the end of visas for investment in real estate, with the PS, BE and PCP voting in favor, and the PSD, IL and Chega against. The real estate market is hoping that the new government will revive the gold visas. Hugo Santos Ferreira, from the Portuguese Association of Real Estate Developers and Investors, recently told Expresso that he "hopes that the new government will be able to rehabilitate its image and relaunch it", referring to a "green rental and affordable rental regime", in the sense that the state will grant visas to those who invest in real estate to put on the market. In order to discuss "seriously" whether or not gold visas should be maintained, João Pereira dos Santos says that more data is needed. "We don't know if the houses were bought by people who have settled in Portugal or who are only coming for 14 days, which has different impacts on private consumption. We don't know if the houses are closed or rented out, or where they were bought, whether in redevelopment areas or more touristy areas. And it would be possible to know, because the data exists."