They think it’s all over, well it is now!!
After 3 interminable years of Brexit and by virtue of a resounding victory in the recent UK General Election the UK Prime Minister Boris Johnson eventually managed to get the Withdrawal Act through the Houses of Commons, and to have it ratified by the House of Lords.
At least we can all move on and hopefully by the end of 2020, the transition period will have been time enough for the EU and the UK to have signed off on a future Trade Agreement. The most important outcome for the approximately 50,000 Brits living here in Portugal and the 400,000 Portuguese Citizens living in the UK is that a reciprocal agreement has already been reached regarding the rights of citizens to reside in the respective counties, up to now 2,500,000 of the 4,000,000 EU nationals have registered in the UK.
How will Brexit affect the property market in our region of Central Algarve…or the so-called Golden Triangle? The short answer is, probably not at all. In the past few years, Portugal has attracted numerous nationals of countries who are not members of the EU.
There are however not one but two elephants in the room and they are proposed changes to the NHR initiative and the Golden Visa programme. The Portuguese Government, as part of the 2020 State Budget, is studying the possibility of the termination of the current NHR status this year and applying an income tax rate for foreign retirees of between 10% and 20%. The subject is on the table of the Portuguese Council of Ministers and a final decision is imminent.
For retirees who are already taking advantage of this tax break, there is nothing to fear in terms of any retroactive action, this new regulation will only affect newcomers. This could have a negative effect on property sales, however, the tax percentage being suggested is still very beneficial for most nationals of foreign countries who do not have a double taxation treaty.
The second proposal is that obtaining a Golden Visa by purchasing a property will now only be possible if the property is located away from a major city, Lisbon and Porto being the two most obvious, however, the Algarve, as it is a `coastal region` would also be affected. The the general outlook for the property sector in 2020 is bright, inquiry activity is buoyant and sales are being made.
By Doug Styles
Managing Director of Property Styles