Tchau, tax breaks… Portugal’s prime minister is fed up with digital nomads crowding cafés with their laptops and espressos. Next year he plans to end a tax break for foreign residents that, as of July, benefited 89K foreigners who spent at least 183 days/year in Portugal. The program includes a preferential 20% tax rate on “high value” work (think: doctors, authors, IT specialists). As locals face a cost-of-living crisis, the PM called the program a “fiscal injustice.”
Cold shoulder: Earlier this year, Portugal decided to end its citizenship-by-investment program (aka: “golden visa”), which gave foreigners a path to EU residency by investing a set amount of $$ (usually $520K+) into the country. Picture: a second home.
US influx: Last year Americans received the most Portuguese golden visas — and have been quick to snatch up digital-nomad visas, a newer permit that requires applicants to earn 4X the Portuguese minimum wage and live in the country most of the year.
Work-from-Rome… After the ’08 financial crisis, European countries introduced tax and investment incentives to attract deep-pocketed foreigners (and their $$). During the pandemic, those programs surged in popularity as newly remote employees set up desks overlooking Mediterranean beaches.
Problem: Wealthy foreigners are causing property prices to soar, especially in Lisbon, Barcelona, and Athens. Rent in Lisbon jumped 43% last year to a record high.
Solution: Now European lawmakers are calling on countries to eliminate golden visas, and residents are protesting the digital nomads who are pricing them out.
Too much of a good thing can turn sour… Foreigners have invested some $26B over the past decade in European countries through golden-visa programs. Plus, digital nomads willing to spend $6 for a pastry can boost those economies. But a lot of countries have reached a tipping point, and the locals can no longer afford to keep up with the Joneses filling up their block.