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A series of factors contribute to the recent surge in prices in the real estate market in Lisbon in particular and throughout Portugal in general.

  1. An exodus of residents over the past half century from the historical centres;

Until the recent boom, central Lisbon has been experiencing degradation and urban flight over the past 50 years.

  1. One of the lowest property taxes in Europe;

Rates in Portugal are a fraction of most EU countries, easing the plight of many Portuguese property owners: “Land rich, cash poor”.

  1. Modest cost of living in Portugal (the lowest in Western Europe);

Due to low wages and severe austerity measures, the cost of living in Portugal is an additional attraction many investors and retirees.

  1. A legal, fiscal and market framework creates conditions discouraging long-term rentals;

Long-standing legislation favouring tenants over landlords have left many property owners reluctant to let long-term.

  1. The popularity of Portugal and the subsequent explosion of general tourism;

Lisbon and Oporto are “hot” tourist spots. These inviting cities have become preferred destinations for holiday makers in the European Union.

  1. The post-crisis revival of residential tourism;

Portugal is rapidly becoming the “Florida” of Europe, attracting retirees from northern European countries.

  1. Low-cost airlines create affordable “bridges” throughout Europe;

Inexpensive flights have opened travel options for millions of tourists, both young and old making long weekends and occasional “escapes” affordable options.

  1. Portugal is one of the safest countries in the world;

Low crime rates and only a minor threat of terrorism make Portugal a safe haven in an increasingly insecure world.

  1. Golden Visa popularity

The ready availability of European permanent residence visas and eventual dual nationality in exchange for real estate purchases above €500,000;

  1. Non-Habitual Residence programme success;

Pensioners and freelancers are two significant groups lured by a promised tax holidays under “NHR”.

  1. Real estate investment enhanced by near-zero interest rates;

The historically low cost of borrowing and the renewed openness by banks to lending have fanned the flames of real estate investments.

  1. Absence of Capital taxes

Portugal has neither a Wealth Tax nor Gift and Inheritance Tax between immediate family members.

Policymakers routinely fail to anticipate the consequences of most of these factors or show flagrant indifference to them.