Brexit drives British millionaires to Portugal for tax and EU perks — but it’s about to get complicated

Viceroy Residence terrace and pool view at Ombria Resort CREDIT: Sphere Estates

Some British holidaymakers are taking their chances with the traffic light system this summer and heading to Portugal, unwilling to go any longer without their regular fix of Algarve beaches, Lisbon buzz and a proper pastel de nata. But for an unprecedented number of others, a fortnight in the sun is not enough. 

More Britons than ever before have decided to make Portugal their permanent home, with 2020 seeing a 34% rise in those living there, according to the latest data from the country’s borders and immigration service (SEF). Now, the 46,238 official British residents in Portugal are the country’s second largest group of foreign residents after Brazilians (pre-Brexit, we were in sixth place). 

Brexit has been a huge driver, says Christina Hippisley, from the Portuguese Chamber of Commerce in the UK. “Before 2016, the numbers either shrank or grew by a maximum of 4% a year, but they’ve been shooting up ever since.”

Portugal’s non-habitual resident tax scheme, which offers foreigners low income tax rates, has also been a magnet for those able to spend at least half the year there. Now that we’re non-EU, UK buyers in Portugal qualify for a golden visa too – which brings perks of European visa-free travel and, after five years, citizenship. 

The scheme is changing, though. From January 2022, much of the Lisbon, Porto and Algarve coast – where most foreigners traditionally settle - will no longer qualify, in a move to push property investment towards more rural areas. 

The stars are aligned, it seems, as Covid has also seen big budget buyers look for greener, more open spaces. And while the Portuguese countryside has, until recently, been the place to look for the cheap, rustic lifestyle in sleepy villages, new high-end developments that blend rural luxury with authentic Portuguese design and a respect for nature are on the rise. 

L’AND Vineyards' Lake house

For golden visa purposes, most of Portugal is classified as low density and still qualifies - and few will even have heard of the place that has seen the biggest rise (28%) in foreign residents in the last year. Viana do Castelo, a historic riverfront town near the border with Spain’s Galicia region, “is very beautiful, green, unspoilt and with much cooler temperatures than the Algarve. It’s a bit like Surrey,” says Hippisley. Cheap property is still easy to find, but it’s also the place to pick up huge farmhouses or palatial villas, such as this seven-bedroom, 19th century house on sale for €2m through Luximos Christie’s. 

L'AND's 30 suites and villas are set on 66 hectares

Those who like their wine tourism have new options now, too, beyond Porto and the Douro valley. Montemor-o-Novo, a rural town 50 minutes from Lisbon, close to the UNESCO world heritage town of Evora, is home to a new five-star wine retreat called L’AND Vineyards. Its 30 suites and villas for sale, set on 66 hectares, have use of amenities including a Marcio Kogan-designed vinotherapy spa and a wine club in which homeowners can make their own personalised wine. 

L’AND is a natural oasis of the high-quality

“Buyers who are more focused on the golden visa are open to looking at luxury countryside options – think Soho Farmhouse or Mr and Mrs Smith – and L’AND is a natural oasis of the high-quality, laid-back luxury that really appeals to wealthy buyers,” comments Jo Leverett at Cluttons, who are marketing L’AND’s villas from €1.05m. 

Bespoke wine-making will also be one of the attractions near ultra-chic Comporta at CostaTerra Golf & Ocean Club, the first European resort for the US developer, Discovery Land Company, whose residential communities have a fond following among American celebrities and billionaires. Set on 295 rural hectares of pristine coastline and wild pine forests, this will be all about high-end, low-density, environmentally-sensitive living – a place to horse-ride through the waves before retreating to your luxury villa. 

A farmhouse in Alentejo - €3.5m through Nest Seekers International

It brings a new price point to the Alentejo coast, too, with the plots alone starting at €4m – then buyers work with an architect to custom-design their home. “We’re seeing a lot of interest from the UK,” reports  Adrian Wadey, CostaTerra Golf & Ocean Club’s vice president of sales. “They like the travel convenience, great year-round weather, the golf and amenities. Most want the custom lots with ocean views and almost all UK buyers are interested in the Golden Visa.”

Signature apartments at Palmares Ocean Living

The super-rich needn’t avoid the Algarve entirely, however, to secure a Golden Visa after next year. Defined as a tourist resort rather than ‘housing’ development, Palmares Ocean Living & Golf near Lagos – where apartments and villas range from €780,000-€3.4m – will still qualify, and there’s no requirement to rent out your property. 

The view from one of the Palmares apartments

“Most buyers aren’t buying because of the visa option, but it’s the icing on the cake,” comments Alda Filipe from developers Kronos Investment Group. “It means they are free to use the property as much or as little as they wish – and for those who settle here permanently, the visa provides an easy means of doing so.” 

One of the Palmares villas

This is the Algarve’s “wild West,” adds Filipe, “4 km from stunning Meia-Praia beach”. Onsite facilities will include a Robert Trent Jones Jr golf course and a club-house designed by Pritzker award-winning RCR architects, with a restaurant by Michelin-starred chef Louis Anjos.”

 

 

Ombria is emerging as a secluded, Portuguese retreat CREDIT: Sphere Estates

Ombria, in the Algarve’s low-density, rural Loulé district, is also emerging as a secluded, Portuguese retreat among green hills, rivers and cork forests, for those who prize luxury, wellness and nature – and who may also want a golden visa. Set to open in early 2022, Ombria’s wide range of properties include branded apartments that belong to the five-star Viceroy hotel, from €555,000, to 12 huge, off-plan Alcedo villas from €2.95m, which blend high-luxe, contemporary design with touches of Portuguese tradition. 

As this is a rural resort, the minimum investment needed for a golden visa is €400,000 (rather than €500,000 in city or coastal tourist locations) – and Robert Green, director at Sphere Estates, which is marketing the properties, thinks many British buyers have yet to latch on to the implications, and limitations, of Brexit. “The pandemic has prevented free travel for over a year now. But for those wanting to spend longer than 90 days out of every 180 in Portugal, a golden visa is really the best option and I believe we’ll see a rise in uptake by British buyers over the next year,” Green says. 

Architect Jutta Hoehn's rustic beauty near Loulé

On the swanky Quinta do Lago and Vale do Lobo resorts, architect Jutta Hoehn’s name graces many of the multi-million euro super-villas under construction – or available off-plan, such as this 900m2 villa on sale for €4.5m. But Hoehn is subtly steering her wealthy clients and buyers to less obvious spots and a different style of design, from seafront luxury on the Ilha de Faro to rustic beauty near Loulé. 

Most dramatic is an entirely mirrored house, set 40 metres from the sea in the Algarve fishing village of Olhos de Água, near Vilamoura. “This house sits beneath beautiful deep ochre cliffs and is surrounded by exotic plants and palms, but it was very ugly and could not, by law, be demolished, simply remodelled. So we are totally cladding it in mirror, reflecting the surroundings so the house becomes part of the landscape,” says Hoehn. 

She also has her own development of eight houses at The Sky in the “very sweet, traditional” village of Santa Barbara, 15 minutes from the millionaires’ belt around Quinta do Lago. The ocean-view houses will come with private lifts, pools and double height ceilings, and the concept, she says, is “stylish and Made in Portugal, as every material used comes from here. They are lock up and leave, but in the countryside, which is the first of its kind in this area”. 

Her timing may well be perfect, as now is the time when foreign buyers in Portugal are more willing than ever to venture away from the coastal hotspots and embrace the new and beautiful unknown. And when they find it, they will most likely be able to visit whenever they want.