Daniel Clarke moved to Portugal over five years ago but has become a victim of a housing crisis which has forced the government to end its controversial “golden visa” scheme and ban new licences for short-term tourist rentals.
The 35-year-old British travel writer could no longer afford to live in Lisbon so moved south to the Algarve and believes the government is missing the point by targeting tourist accommodation when it announced an end to the golden visa scheme last week.
The scheme offered EU passports to non-EU nationals in return for investments, often in property. New licences for tourism accommodation, such as Airbnbs, will also be prohibited – except in less populated rural areas.
The crackdown could hit British people who have wanted to escape Brexit, but has been blamed for pushing up house prices and rents as wealthy foreigners bought up villas.
In recent years, property prices have soared in Portugal, one of the poorest countries in Western Europe, but wages have not kept pace. Last year, more than 50 per cent of workers earned less than €1,000 (£1328) per month while in Lisbon alone, rents jumped 37 per cent.
The problem has been made worse by inflation which currently stands at 8.3 per cent.
Portuguese Prime Minister, Antonio Costa, said last week the housing crisis no longer only affected just the vulnerable but average families.
The government will regulate rent increases, Mr Costa said, and offer tax incentives to landlords who convert tourism properties into houses for locals to rent. He said the state would rent vacant houses directly from landlords for a period of five years and put them on the rental market. It is not certain when the measures will be brought into action.
However, housing campaigners say there was no point scrapping the golden visa when Portugal introduced a digital nomad visa last October for wealthy foreigners.
The visa gives non-Portuguese workers with high monthly incomes the right to live and work in Portugal without paying local taxes.
Mr Clarke, who is originally from Dorset but lived in Australia before moving to Portugal, believes the Portuguese government needed to act to address the housing crisis by halting short-term tourist rentals.
But he said most digital nomads use medium-term rentals of two or three months, not tourist accommodation.
“I think to a degree (these measures) will address the issue and something has to be done to balance tourism needs with locals’ needs and the fact a spare room costs more than the minimum wage,” he told i.
“But I think the mid-term rental market is a sector which does not get much scrutiny but is contributing more to the problem than we realise.”
The Portuguese government faced criticism from two unlikely allies – relocation agencies and the far-left Left Bloc party – which said it would be counterproductive for Portugal’s economy and hand landlords more profits.
Henley & Partners, an international relocation agency, urged Portugal not to end the golden visa programme.
“(We) would encourage the government (to)… look at options to adjust it to the current economic and property market context so that it can continue to provide significant benefits of its citizens, rather than removing this important source of investment and having to replace the revenue by taxing its people or raising the debt burden for future generations to come,” the company said in a statement to i.
The opposition Social Democrats and the Liberal Initiative parties called the measures an “attack” on the rights of property owners and businesses and may challenge the measures in the Constitutional Court.
Mariana Mortagua, an MP with the Left Bloc, said the government’s changes would only benefit landlords.
“These measures will not help normal people but the very landlords who have already done very well from rising prices,” she said.
Housing rights campaigner Andreia Galvao accused the government of failing to keep promises to address the housing crisis in the past.
“The goal was that by 2024 all Portuguese would have access to quality housing – it doesn’t look like that will happen,” she said.
Last year, the European Commission called on governments across the bloc to stop selling citizenship to investors.
This is different to golden visas, which offer permanent residency rather than citizenship, but the crackdown by Brussels came amid concerns that these schemes could be a security risk.
Brussels also called for countries to double check if individuals sanctioned in connection with the Russian invasion of Ukraine were applying for or had been granted golden passports or visas.
Meanwhile, one in five Britons – or 21 per cent – said they planned to work remotely from another country this year, according to new research from Finder UK, a financial advice company.
The favourite countries for remote workers in 2022 were the United States (13 per cent), France (12 per cent) and Germany (11 per cent).