12 August 2014
While France has boosted taxes by 70 billion euros over the past three years, targeting high earners in particular, Portugal and Spain – whose property markets were hit hard by the financial crisis – have been creating incentives to lure foreign investment.
Now Portugal’s real estate sector seems to be on the mend, with prices up 4% over the 12 months to the end of March, and foreign buyers – principally from France, but also the UK and China – playing an important role.
The Portuguese Real Estate Professionals and Brokers Association says the three countries accounted more than half of the 3,500 properties sold to foreigners in the first quarter, and the French have now overtaken Britons as the biggest buyers of Portuguese property, especially at the luxury end of the market.
It’s not just about tax levels in France. Portugal has established a non-habitual resident program that allows exempts residents living on pensions from other countries from paying tax on that income. Meanwhile, the French only pay tax at home if they are resident there.
Portugal and Spain have also launched “golden visa” programs that allow non-Europeans to stay in their countries if they buy properties above a certain value, attracting buyers from China, the Mideast and Russia. Together the measures are giving a new vitality to the property market after years in the doldrums.