With property prices showing a persistent rise in many EU countries, governments are constantly implementing new measures to try and contain this upward trajectory, most of which are targeted at international buyers. What will happen next is still unclear, but with the housing crisis topic constantly being brought up by the representatives of many nations, a clear trend is being formed. Here’s all you have to know about how to be safe in case any new measures aimed at restricting foreign investment in EU’s real estate market come along.
The EU Housing Crisis and Its Impact on International Buyers
Throughout the 2010s, thousands of overseas investors looked at EU countries as more than just a place to spend the holidays. With the world becoming increasingly unstable, counting on the European Union’s stability as a safeguard emerged as an amazing plan. It’s no coincidence that this is when Golden Visas programmes started to become wildly popular, especially in EU countries that had the option of buying property as an eligible criterion, such as Spain and Portugal. It was the perfect opportunity to secure residency in the safest region in the world, while also investing in a profitable real estate asset.
In parallel, the same countries also experienced a huge boom in tourism, and it wasn’t long before a great deal of properties were acquired by both local and international investors to be turned into short-term rental units. Many of those were old and decrepit apartments which had to undergo major renovations. That brought new life back to buildings in historic neighbourhoods, naturally generating appreciation as well.
The issue started when property prices started increasing more rapidly than the average earnings of the local population, sparking a housing crisis. However, instead of assessing the problem from all angles, governments so far have chosen to create measures that mainly affect international buyers, with no real help to the local community, which is probably the main reason why property prices keep increasing and the housing crisis isn't fading.
Measures That Show a Trend and What to do About It
When we look at some of the past measures governments from EU countries have taken to try to contain their housing crisis, it’s possible to spot a trend of restrictions toward non-residents.
The first move was aimed at Golden Visas. In that front, Portugal discontinued real estate purchase as an eligible route and Spain ended its programme entirely. Spain then had an unsuccessful attempt to prohibit non-residents from buying property in its territory, especially in the Balearic Islands. However, the country has recently announced the intention to introduce a tax of up to 100% on property purchases made by non-residents from outside the European Union.
At every new measure and announcement from EU nations struggling with the results of the combination of low offer and high demand in their real estate markets, a trend of making property purchase more difficult for non-EU residents is being clearly painted. And there are many concerns that Portugal could follow this trend, as track record shows.
Whilst a full restriction hasn’t become a reality due mainly to the fact that Article 63 of the Treaty on the Functioning of the European Union forbids any limitations on capital flows connected to real estate purchases — including housing — by citizens who are not residents, things can swing very differently when it comes to taxation. After all, tax collection and rate-setting fall outside the direct responsibilities of the European Union. Therefore, countries will not face the same barrier with taxation that they face when it comes to not allowing purchases at all.
How to Avoid Future Restrictions
If you are a non-EU resident who wishes to buy a property in Portugal, there are some ways you can avoid any restrictions that may come your way.
1. The Short-term Answer: Buy a Property Now
It may seem obvious, but that’s because it is. Still, it’s important to remember that any new laws, tax regulations and similar measures usually don’t apply to people who have already secured their assets.
So, if you wish to have a second home in Portugal, or to invest in a property that you’ll rent out for immediate profit, the time to act is now. Especially if you are under 35 and a first-time buyer, or if you wish to invest before the inevitable increase in prices.
2. The Long-term Approach: Get an EU Residency Card
Again, no major news. Just an important reminder that becoming an EU resident is something well within your reach through Portugal’s Residency by Investment programs: the Golden Visa and the D2 Visa.
Although buying a property will no longer allow you to obtain a residency permit, you can still invest in funds or branch out a business in Portugal to be able to apply to one of Portugal’s Residency by Investment Programmes, which later on can also open you the doors of citizenship.
3. The Ultimate Solution: Secure Both and Potentialize Your Investment
By purchasing a property now, you’ll make sure to get better prices than you will in a year or two from now. However, if you wish to buy another property in the future – perhaps even with the profits you made from the first one – then what? You could face over-taxation and other measures that may come your way. Well, not if you already hold your EU residency, which will shield you from any future changes.
That’s why investing in a property now, while also starting your path toward obtaining residency in Portugal – a full member of the European Union and the Schengen Area – is the best possible strategy in the short, medium and long term.
Portugal Homes, a Full-Service Partner That Doesn’t Go a Long Way. It Goes All the Way
Having a local and experienced partner is key when it comes to making an international investment. In Portugal, you can count on our market knowledge and turn-key solutions to make the investment possible in the most agile way.
From property selection to residency consultancy, we will be at your side even after you have your property keys on one hand and your residency card on the other.
Talk to us to best understand how we can assist you from A to Z, before any new changes and restrictions. When you act fast, and we act the part, your investment easily becomes profitable and bulletproof.
Read More:
Buying Property in Portugal as a Foreigner in 2025: The Ultimate Guide
Why Non-Habitual Residents Still Want to Buy Property in Portugal - and Why You Should Too
Portuguese Residency - Can You Still Obtain It by Buying a Property?
