Holiday Homes: The property market in Lisbon is so hot right now, it’s being called ‘the California of Europe’
One of Europe’s most beautiful cities is also now one of its most vibrant and dynamic.
For decades Lisbon’s development and historic architecture was neglected, but things are looking better for the city, tourism is up, unemployment down, and foreign money is bringing in new investment.
One of the drivers of this surge in vitality was the change in 2012 that ended restrictive tenancy laws, allowing property to be rented at market rates. This encouraged renovation and redevelopment of historic properties and urban areas in decline.
The Portuguese government also introduced a Golden Visa scheme to encourage inward investment. This offers residency in return for a €500,000 real estate purchase and is proving attractive to non-EU citizens, in particular Brazilian, Chinese and Turkish buyers.
Last year property price rises of around 3 per cent on the previous year were reported, as was an increase in demand for both short and long-term rentals. “There is a shortage of good renovated properties, and incoming tenants want quality residences,” says Roman Carel, partner at property specialist Athena Advisors.
Carel says, “Lisbon is now seventh on the PwC list of cities in terms of most attractive real estate, above London and Paris.”
Athena Advisors works with local developers who are delivering high-end properties in central locations. Prices are lower than in many other European capitals, with averages of €1,200psqm for standard property and €5,000 for prime stock.
Carel says luxury property on top streets, such as Avenida da Liberdade, can already command €7,000psqm, but that there is potential for it to “go north of €10,000psqm.”
Projects being marketed by Athena include the historic former home of the noble Braganza family, in the popular Chiado area, which overlooks the Tagus river and will have 12 apartments priced from €700,000. It’s also listing a grand palace in the historic Alfama area, which will offer 21 units, priced from €650,000 for one bedroom. And launching soon is a redevelopment of one of the most important theatres in Lisbon, about to be transformed into eight apartments.
Portugal also offers a beneficial tax regime. Non-habitual resident status applies to people who’ve not been a tax resident in Portugal for the previous five years but make it their main country of residence. This gives exemption, if qualifying criteria are met, from paying tax on income from outside Portugal for ten years.
In addition, income generated in Portugal for certain occupations is taxed at a fixed rate of 20 per cent. There is no tax on overseas pensions, no inheritance or gift tax for immediate family, no wealth tax, and tax on income from dividends or investments can be reduced or deferred.
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Carel says, “Lisbon is now seventh on the PwC list of cities in terms of most attractive real estate, above London and Paris.”
Lisbon-based developers are also aiming to capitalise on Portugal’s attractive climate and relaxed quality of life. Arthur Moreno, co-founder of Stone Capital, which specialises in the renovation of historic buildings, believes Lisbon is on track to be as successful as cities like Barcelona or San Francisco.
“Portugal is the California of Europe,” he says. “I have a passion for Lisbon. I’ve always believed in the city.”
Visit athenaadvisers.com
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