Living Like Royalty with Algarve Property

At Compass Property Sales in the Algarve, we’re thrilled to see Portugal emerging as a top choice for real estate investors from around the world. Recently, there’s been a buzz about Prince Harry and Meghan Markle potentially purchasing a property in Comporta - a secluded, upscale area south of Lisbon known for its stunning beaches and exclusive developments (Source: The Portugal News). Although the news hasn’t been officially confirmed, their interest alone highlights the unique appeal Portugal offers to those seeking privacy, quality of life, and wise investments. Notably, this interest aligns with Idealista’s recent data, showing that the Algarve property market continues to trend upward.

Portugal’s charm goes beyond its beautiful landscapes. The country combines political stability, safety, and high-quality healthcare and education, all while offering mild weather year-round. These factors make Portugal an attractive choice for people prioritising lifestyle and long-term property value in their investments.

In a surprising turn of events outlined in Portugal's 2024 Government Budget, the Non-Habitual Resident regime (NHR) was terminated as of 1 January 2024. However, almost simultaneously, a new regime was introduced by the government, offering tax holidays and exemptions to individuals, employees, and self-employed individuals who relocate their tax residency to Portugal and fulfil specific criteria related to their professional activities.

This new regime, known as NHR 2.0, marks a significant departure from its predecessor, NHR 1.0, which catered to passive income earners. NHR 2.0 now aims to provide relief to active income earners, whether employed or self-employed, who are engaged in technical, scientific, or academic roles within R&D projects for production and development, academia, and start-up ventures.

Access to the benefits of NHR 2.0 may be more restricted, as participation in the program will necessitate involvement in local enterprises with a focus on R&D and innovation. Nevertheless, for those individuals who meet the eligibility criteria, the new regime may offer greater tax efficiency, with the exception of certain pension tax relief provisions.

What Are the Residency Options in Portugal?

The residency options in Portugal have changed over the course of the past 12 months. Moving into 2025, the typical routes are listed below:

1. D7 Visa - Passive Income Residency: The D7 Visa is perfect for retirees, investors, or anyone with a stable passive income, such as pensions, rental properties, or dividends. If you can demonstrate a monthly income of at least €820 (though having more funds in a Portuguese bank account can improve your chances), this visa offers an entry point to Portuguese residency. The initial visa allows you to stay for four months, during which you can apply for a renewable two-year residence permit. After five years, it’s possible to apply for permanent residency or even citizenship.

2. D2 Visa - Entrepreneurial Residency: The D2 Visa is tailored for entrepreneurs who want to either start a new business or invest in an existing one in Portugal. Unlike the D7 Visa, which focuses on passive income, the D2 is geared towards those looking to actively contribute to the economy. To qualify, applicants need to present a solid business plan and demonstrate sufficient funds to support both the business and their living expenses.

3. Digital Nomad Visa (D8): Introduced to cater to the growing number of remote workers, the Digital Nomad Visa is relatively new but already popular among freelancers and employees working for foreign companies. The income requirement is approximately €3,280 per month, and proof of remote employment or freelance contracts is needed. This visa initially grants one year of residency and can be converted into a longer-term permit.

Investment Potential

The coastal regions, particularly the Algarve, have become symbols of Portugal’s distinctive mix of tradition and exclusivity. Even with recent changes to the residency-by-investment program, known as the Golden Visa, Portugal’s real estate market continues to show resilience, and opportunities for international buyers remain strong. The Algarve, with its relaxed lifestyle and vibrant local culture, has especially captivated investors looking for more than just a holiday home.

At Compass Property Sales, we specialise in helping buyers find the finest properties that reflect Portugal’s charm and elegance. If you’re attracted by the relaxed lifestyle, the investment potential, or both, we’d love to guide you in exploring the possibilities along Portugal’s beautiful coast.