A Comparison of Portugal Golden Visa Investment Fund and Real Estate Investment

The recent changes in Portugal Golden Visa Program have made investors hurry in the application process. Many investors have preferred the traditional real estate investment while applying for Golden Visa for Portugal. However, there has been an increasing number of investors who are interested in the investment fund option. Both investment options have their own pros and cons.

If you’re not sure which route to choose, check the following sections to learn more about these two options. You can compare each option and decide which one is better for you.

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Benefits of the Investment Fund Option

Let’s start with the fund subscription option of Golden Visa in Portugal.

It Entails Fewer Costs

The investment fund option does not require you to pay stamp duty, transfer fees or title transfers. However, a property investment includes all these costs.

Also, you don’t spend extra money on essentials like furniture when you invest in funds. The only cost will be the one-time €350,000 investment to qualify for your Golden Visa.

Note that the minimum investment amount for fund subscription will rise to €500,000 as of Jan. 1, 2022. If you consider investing in funds, you may want to hurry in applying for the program.

You Pay Fewer Taxes

For the gains made through real estate, you need to pay a 30 percent withholding tax. Furthermore, you need to pay annual income tax and capital gains tax if you sell your property. Capital gains are subject to a flat rate of 28 percent. This applies whether you’re a tax resident or not.

On the contrary, the subscription of funds does not entail such taxes if you’re not a tax resident of Portugal. In this case, you don’t need to pay any income or capital gain tax on your investment fund.

You’ll Be Bothered Less When You Invest in Funds

A fund manager monitors and manages your investment when you choose the investment fund option. This leaves you with less work. Only the management fees must be paid. The fees are also quite less than the cost of managing real estate property. Also, you only need to fulfill the formalities and meet the minimum investment requirement.

When you invest in real investment, you may need to hire a property management company. It can be necessary to look after your real estate investment. This means extra spending and more hassle. The fund option provides you with experienced professionals that look after your investment. Compared to real estate management, you pay quite less for this work.

Benefits of the Real Estate Investment in Golden Visa Portugal

Real estate investment has its own advantages as well.

You’ll Have More Control

You’re more free when you make a real estate investment. You can rent, sell or even live in it. The fund option, however, requires a fund manager for steering the investment.

You’ll Get Less Burden

Real estate investment is a more straightforward process. However, fund investment entails the process of KYC (Know-Your-Client). This means you have to prove your income and demonstrate its source.

Decide Which One is Better for You for Your Golden Visa to Portugal

Now you know certain advantages and disadvantages of these two investment options. Property investment can be your choice if you want a monthly income from your investment. Or, if you have time and you want to get higher returns, Portugal Golden Visa Investment Fund can be a better choice.

Also, note that property values in Portugal will continue to grow. On the other hand, investment funds can be changeable.

It’s advisable to choose the one that you feel more comfortable with.

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