13 ms·

Portugal’s digital nomad bubble

105 points by ugurs 4y ago

ChuckNorris89 4y ago
>Portugal sought to lure them with tax breaks [...] Portugal, then with no taxes on crypto-derived capital gains, fit the bill [...] “We have neighborhoods now that are mainly Airbnb,” said Ana, the Portuguese teacher, “We don’t have our homes anymore.” [...] locals protest against rising costs and gentrification Surprised nobody saw gentrification and rising CoL coming when they invited crypto asset holders and workers who earn several times more than the locals while contributing much less in taxes. Seems like a move that only benefited the Portuguese landlords and real estate owners at the expense of the rest of the population. If I was a Portuguese citizen I'd be pissed at such a decision that prioritizes wealthy foreign crypto and tech bros over its own citizens and make sure to vote those politicians out. Portugal is not Dubai. It can't afford to be a tax heaven with government revenue funded by oil instead of taxes. A country like Portugal should seek to attract businesses and investors who create jobs and pay taxes there, not attract wealth hoarders who dodge taxes and who's only contribution to the local economy is making landlords richer and buying cocktails on the beach. >The center-right Moedas, for his part, said that while clarity on crypto and taxes is welcome, “when you start taxing innovation too soon, you can kill innovation. And so I'm not aligned with the government on this.” Oh please, taxing crypto assets is not taxing innovation. WTF are you talking about? I feel like I'm taking crazy pills when I read stuff like this.
- ajsnigrutin 4y ago
  This would be no-problem if cities built more houses (especially large apartment blocks) ... well, and outlaw airbnb. I live in a former socialist country that somehow managed to build A LOT of housing in the 70s and 80s, with shitty equipment, but somehow cannot build anything in the last few decades. And not just the government building stuff... normal people could buy a plot of land, get their friends to help, dig a hole and start building... a small loan for bricks and cement, and the basement + a concrete slab was built... then a month or two went buy, and what was left from the paychecks went for a pallet of bricks plus a few bags of cement, and half a floor was made. Repeat for a few years and a house was there... no insulation or a facade, but people could live inside and deal with that later. Papers and permits? As long as you built within some basic rules (far away from the property line and not a too unusual shape), you could basically ignore them, and deal with the "legalization" later. Now you're not allowed to build basically anywhere, papers cost more than the whole material+work did back then, and you're not allowed to do anything by yourself and your friends are not allowed to help anymore. So yeah... good luck.
  - ChuckNorris89 4y ago
    >This would be no-problem if cities built more houses "Just build more houses" is not something that scales infinitely. Long commute distances and geography tends to get in the way with stuff like hills, mountains, rivers, lakes, oceans, etc. while demand from foreigners and tourists will stay virtually infinite. At which point do you stop building and say your city can't house more people without ruining the character that makes it a desirable city in the first place? Should we level Lisbon's 2-4 story housing and turn it into a dystopian city with hundred story megablock towers like in Judge Dredd, just so that everyone in the world who wants to move to Lisbon has a place to live there? But then people won't want to live there anymore if Lisbon is just megablocks.
    - slyall 4y ago
      But in this case we are talking about replacing single-story buildings cities with multi-story apartments. Just about every city has plenty of room to build lots of housing via upzoning.
      - ChuckNorris89 4y ago
        > single-story buildings cities with multi-story apartments How many single story buildings does Lisbon have? I don't remember seeing that many. And how many of those single stary buildings are not under UNESCO historical heritage protection laws and you are allowed to buldoze?
        ajsnigrutin 4y ago
        Lisbon is a large city, not everything is the historic "old" city center. You don't even need to demolish anything, since there is space around, and even if you do, there are a lot of not-historic areas there.
    - ajsnigrutin 4y ago
      You don't need infinitely much, you just need a more than you have now. We have vast areas here (Ljubljana, slovenia) where you're only allowed to build two-story two apartment buildings and nothing more.. and right next to those buildings are large socialist-time apartment buildings with many apartments. But nope, you're not allowed to build higher there. Even in rural areas, we have a lot of empty land, right next to the road, and nope, not allowed to build there, because people who built their houses now complain and don't want new houses there. They also complain if anyone wants to create any kind of business there, and then they complain that there are no jobs there, and that people have to drive to the capital. Look at eg. sillicon valley for example... just building 3, 4, 5 story apartment buildings in areas where there are single-family houses would multiply the usable area for apartments by 5 times, making the buildings larger (combining multiple plots) even a lot more, and since the number of apartments goes up, there is much more potential for investors to offer above-market rates for those plots of land where they could build bigger and higher.
garbagecoder 4y ago
I was just in Lisbon yesterday. I recommend the Lisbon Winery for a lesson in port wine and great food. It’s a nice city, the level of English is high, but it’s not as modern as other European cities. Plus, who wants a horde of cryptobros anyway? What “innovative” about tulipomaniacs? As for Airbnb, that’s the same is most touristy cities and it’s not just because of nomads.
- ajsnigrutin 4y ago
  > As for Airbnb, that’s the same is most touristy cities and it’s not just because of nomads. Cities should be for citizens... tourists belong in hotels.
  - thefounder 4y ago
    What if the citizens want to make an extra buck renting their property?
    - ajsnigrutin 4y ago
      There's a difference between (long-term) renting and airbnb. Just ask the neighbours, who normally don't care about long-term renters and complain a lot about ever-changing tourists and all the issues that brings (from safety to loud parties). You cannot have a factory in the middle of a residential zone, why can you have (what is effectively a single room) hotel?
      - rcruzeiro 4y ago
        I lived from 2014 to 2016 in a really cosy flat with a sloped ceiling in downtown Lisbon. I literally moved away from there solely because the unit beneath mine turned into an AirBnb rental and there were constant loud parties all night long pretty much every other day. Not to mention people leaving the building door open, the rapid degradation of the stairwell with all the tourists dragging their suitcases (and the fact that the parties often extended to the stairwell).
    - 4y ago
Kukumber 4y ago
"digital nomad" how is that a thing, as a society we keep reaching new lows year after year, this is very concerning "repeating past mistakes is our motto"
exhibitapp 4y ago
Not advocating for the influx of "crypto bros" and "digital nomads" but to blame the current wave of inflation on them is a bit ridiculous
- Melting_Harps 4y ago
  > Not advocating for the influx of "crypto bros" and "digital nomads" but to blame the current wave of inflation on them is a bit ridiculous Good, because this article is about neither but easy to deflect if all you look at is the title; its mostly about the affluent and those who could work remotely (not entirely nomadic as they were already EU citizens) who took advantage of this scheme, here are the most important takeaways that support that it's scope goes beyond either for the issues seen now on PT: > Belgian entrepreneur Jan Deruyck, who moved to Portugal in 2021 with his wife Morgane to build feminine health startup Guud in “full isolation” during the pandemic, is one of them. But a year and a half later, he’s out: “[They have] huge ambitions, but there’s little execution.” > Thank the Web Summit for the visas' shift toward tech workers: It’s “one of the reasons why Lisbon got on the map of Silicon Valley entrepreneurs,” said Armand Arton, founder of the Global Citizen Forum, a members’ club for well-heeled cosmopolites. “Then COVID happened and we started getting calls from wealthy American families saying they wanted a residence permit to enter Europe at any time [regardless of travel restriction]. They got golden visas by investing in technology companies.” > Not to be left out, EU citizens also flocked into Portugal to work remotely during the pandemic, taking advantage of a “non-habitual resident” tax regime that exempts foreign income from taxation and charges a flat 20 percent rate on Portugal-generated revenue from high-value professional activities. Managing a company or working in the technology field can qualify for such activities, making the scheme attractive to digital nomads. I'm a DN and came over during COVID, in the onset PT was on my list, but after the headache I had to deal with the HR government and the sheer incompetence and abject failure to do even basic functions, I realized PT was the same but with the added headache of competing with a much broader scope of people and the longer backorders and growing wait list, the processing time went from 6 months to a year plus for approval because of the influx. Furthermore, the main cities soon started to look like a common tourist traps and all that follows because of the crowds who came over which was one of the reasons I wanted to get out of the US in the first place and ultimately made the decision for me. I'm not surprised locals are pissed, they should be: but they should primarily direct their anger toward their government that because of failed policy, poor economic and investment strategies have made the decades long brain-drain in PT necessary, and in turned hollowed out their entire economy in the process which led to the typical housing and property speculation and consolidation from foreign investment as big as it is, and golden visa schemes the only thing monetarily viable in their country other than tourism. The truth is that Portugal, despite being geographically the most Western of all nations in the EU, is pretty much on par with it's E. European counterparts (made up of former Soviet satellites or fragmented Republics of Yugoslavia) economically, socially and politically so; Digital nomad visas didn't do that, it just made it more accessible in what is actually just a glimpse of what is to come: as the Global population starts to recede (gradually and then suddenly) from it's 8 billion high as more boomer start to die the unfunded liabilities within the system will have already bled it dry in pensions and medical costs and the only thing left will be to compete for citizens with favorable status--Portugal didn't just offer a DN a tax free temporary residence, but full fledged EU citizenship within 5 years with some caveats. It was essentially a longer path toward the Golden Visa that is only offered to those wealthy enough to buy-in their way into passport hunting. Just for context, even Germany (the most non-PIIGS nation) is struggling to keep the hospitals running [0] because of the staff shortages after COVID, and even keeping up with supplies is suffering due to the supply shortages and over-dependence on imported made drugs and devices in a mainly manufacturing country is staggering, and it has been made worse since the invasion in Ukraine due to the cost hikes on everything. 0: https://www.youtube.com/watch?v=075AAaehmN8 https://www.youtube.com/watch?v=075AAaehmN8
alzamos 4y ago
Currently living in the Algarve after moving to Lisbon with my partner for her studies years ago. I know a few non-crypto entrepreneurs who came here for the NHR (non habitual resident scheme - the scheme mentioned in the article which allowed for the 20% tax cap on foreign income). I can confirm that a lot of them were incredibly frustrated with the bureaucracy they encountered, not just when dealing with the government, but generally in everyday life. Most people have war stories related to accountants, lawyers, banks, telecom companies or landlords. The real kicker was when they realised that the 20% didn’t include social security payments, bringing most of them (those that didn’t pay hefty fees to set up companies in tax havens, and pay themselves exclusively in dividends) to an effective rate that wasn’t that far off what they’d be paying elsewhere. Needless to say the expat churn has been quite high. Regarding Airbnbs and rising housing prices - I’m no economist but intuitively, I’ve always thought it made more sense to blame the explosive growth in tourism Portugal has had in the last decade or so (6M tourists visiting Lisbon, a city of 500k people) rather than the 10-20k digital nomads. Would be curious to know if anyone has better numbers or studies.
- mancerayder 4y ago
  > Regarding Airbnbs and rising housing prices Didn't they recently crack down on Airbnb's, adding requirements that should theoretically lower the drive to turn unoccupied housing into Airbnb's (essentially limiting people purchasing flats with this intention)?
- user_named 4y ago
  Expats complain about bureaucracy everywhere. A German expat in Sweden will complain about Swedish bureaucracy. A Swedish expat in Germany will complain about German bureaucracy. It does not mean anything. Expats complain about everything.
  - AYBABTME 4y ago
    Agreed. Expats don't remember the bureaucracy they had to deal with in their own countries, because they did it: - over the years - step by step - with the help of their parents or simply their parents took care of most things when they were young/born/growing up. Then they arrive in a new country and realize what it's like to administratively become a functional resident. You probably got your first bank account in your teenage, your national IDs as a newborn, etc. Then you move elsewhere and you need to create all these things from scratch and discover them also.
lildata 4y ago
Young Portuguese have been emigrating for the last 50 years. The country is full of second residences, bought by people who took advantage of cheap real estate until recently. Blaming today's inflation and cost of living on a few digital nomads or crypto people doesn't make much sense. What also chocked me when visiting Lisbon or Porto is the number of old abandoned buildings in what I would consider nice areas. I have always wondered what was the reason for that...
- whimsicalism 4y ago
  > What also chocked me when visiting Lisbon or Porto is the number of old abandoned buildings in what I would consider nice areas. I have always wondered what was the reason for that... Likely property that is inherited to families that emigrated.
- whynotmaybe 4y ago
  No idea about Lisbon but it was common in Brussels to let an old building "rot" to the point where the owner could destroy it and rebuild a new one. This way, they could build a bigger/better building and sell apartment at higher price than just fix the original building. Demolition permit are hard to obtain but if your building is too decrepit, the city will force you to destroy it.
  - deleted 4y ago
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  - pjmlp 4y ago
    It used to be common, but then many cities got fed up of it, and now many municipalities have local laws to take ownership for the city if the owners behave this way.
    - alvah 4y ago
      -can't get permission to build due to massive amounts of red and green tape -the only economically sensible option is to let the building fall into disrepair bad enough that the government lets you demolish -governments close this "loophole" by seizing your property and the problem is "the owners behave this way"? FMD.
tiffanyh 4y ago
I wonder how many came via Pieter Levels https://rebase.co https://rebase.co (online immigration service)
- FlyingSnake 4y ago
  I know about this website as well. Pieter is a smart and maverick businessman and he simply jumped onto the opportunity when he saw one.
PaywallBuster 4y ago
Portugal is heavily bureaucratic and centralized in Lisbon Fire/reduce public servants and spread them away from Lisbon, there, solved! sources: "highest increase in jobs can be seen in central administration" https://www.portugalresident.com/number-of-public-sector-workers-close-to-highest-of-all-time/ https://www.portugalresident.com/number-of-public-sector-wor... https://ec.europa.eu/social/BlobServlet?docId=19963&langId=en https://ec.europa.eu/social/BlobServlet?docId=19963&langId=e... 76% centralized government https://op.europa.eu/en/publication-detail/-/publication/b9bd6909-649b-11ed-92ed-01aa75ed71a1/language-en https://op.europa.eu/en/publication-detail/-/publication/b9b...
- deleted 4y ago
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crossroadsguy 4y ago
Lots of Goan friends have finally opted for that "ancestral" Portuguese passport and none of them have any intention of either working or staying in Portugal ever.
- louloulou 4y ago
  Why would you not get a free EU passport if you could?
  - FlyingSnake 4y ago
    One reason could be that Goa has the highest GDP per capita among Indian states and Goans are the richest among Indians. Goa is famous for its Susegad lifestyle and there is relative prosperity in Goa that's not usually present in other regions. However the Goans who leave shores head to UK skipping Portugal altogether.
  - crossroadsguy 4y ago
    Well, I wasn’t saying they should not. I was just pointing that out - kind of being in sync with what the post is pointing to. As for not getting EU passport even if you could get that for free, there are too many very common and valid reasons to be listed here. And in fact there are other Goan acquaintances who didn’t want to. So let’s leave it at that.
zeruch 4y ago
I certainly hope so.
- deleted 4y ago
  [deleted]
- VulgarExigency 4y ago
  Same. Digital nomads, leave, go away. They have a negative impact on the economy.
maeil 4y ago
Is this purely a Lisbon thing, or has it exploded over the last 6 months? I visited Porto last spring and there weren't any crowds nor many foreigners, it was pretty quiet.
- csomar 4y ago
  It's being blown out of proportion for click-bait reasons. The journalist and the people he interviewed are delusional too (ability of Portugal to tax). There is churn even with the tax rebates because of how bad portgual is. This thing would not work with taxes or expensive prices/real-estate. Nomadism is ephemeral. The bubble will pop as soon as the new hottest place comes into the picture.
- pjmlp 4y ago
  It is everywhere, in all major cities, Porto, Coimbra, Braga,... This year quite a few thousand university students had to give up their place, because they could not find affordable housing.
RagnarD 4y ago
I wouldn’t say Lisbon is an ideal city to settle down in. https://www.air-worldwide.com/publications/air-currents/from-1755-to-today-reassessing-lisbons-earthquake-risk/ https://www.air-worldwide.com/publications/air-currents/from...
- rcarmo 4y ago
  You should read the article to the end. We get multiple small (i.e., hardly felt) quakes throughout the year that point to a steady release in pressure in the fault.
pjmlp 4y ago
Yeah, affordable living only for the Portuguese that have to find housing on the outskirts and drive one hour to work, because naturally our public transport network isn't that great anyway. Thankfully I got my housing situation clarifyied several years ago.
yieldcrv 4y ago
> Critics “have to understand there is not a dichotomy” between drawing in outsiders and caring for locals. Can confirm, I’ve stayed longer than short term in many cities and am a transplant in all cities. Some places handle it better than others, every place points fingers at a the nearest most visible externality. What they all hardly consider: - their neighbor could have set the rent super high at any point in history, and didnt gamble on doing that then and didnt have to gamble on doing that now. the rent doesnt have to be that high and you can likely peer pressure them into not raising it to its highest acceptable threshold - I dont care what the rent is anywhere, more on this later - anyone that can afford the current rent, set unilaterally by a gambling landlord, is usually paying more than everyone else - and circling back, any unit in any city would satisfy me, so even if I would pay $6,000 in Miami and thats super high, the $1500 place in Austin would remove me from the market, even though thats high to people in Austin (example, I dont actually know, or care) - all together this puts it more so on the gambling landlords in all places, yes there are some tenants that ask for higher rent just to skip the application queue but I would need that quantified
nodemaker 4y ago
Yeah one thing I have learnt in my adventures is that you should never try to do business in a non advanced economy. I keep all my business in the Netherlands no matter where I live.
rcarmo 4y ago
The article is way overblown and borderline clueless. First off, the Luddites demonstrating before the Web Summit had a political backing, they’re not a grassroots movement. That demonstration happened for the cameras (and to further a small party’s ambitions to the limelight). Second, there is indeed backlash against the golden visa program, but the most meaningful bits are due to visas being granted to people who do zero actual investment in the country. As to real estate, this is just the peak of a long crisis brought upon by idiotic zoning laws that favored high-value condos and villas, under pressure from a bunch of lobbyists from the building industry (we have at least two major cement lobbies here, each driven by its own influential family). That, an emphasis on tourism and landlords’ resistance to maintaining or rebuilding existing buildings (partly due to inheritance laws, yes, but mostly driven by greed) has made it impossible to buy new flats in Lisbon even before “gentrification” from techies began. (AirBnB is just another factor in this - a lot of those nice villas and flats are priced outside local affordances, and whoever buys them does so to rent out and drive a quick profit, since a lot of AirBnBs aren’t even taxed…) The only thing the article gets right is that we have a completely bullshit legal and tax system that takes far too long for anyone to sort out - even natives. As an example, it is _much_ less sensible to work as a tech contractor here (unlike, say, the UK) because the fiscal load and legal protection are all stacked against you. Even with “instant company” fast-tracking (which gives you a working legal entity in a few hours, provided you know where to apply to and how to do the paperwork), setting up a business and having official accounting requires some effort for a random Jane/Joe, especially if foreign. But those barriers are fixable if you hire a local relocation/setup service, so real startups and savvy techies can breeze through those. The real trouble comes when you need to do contracts, pay taxes, etc. and there is a legal issue — courts here are slow, Byzantine and can take years to close a case, so brokerage (which can be fraught to navigate) is often the only option. Anyway, the country isn’t broken because a few thousand crypto bros decided to settle in nice villas here. I know of several companies that are thriving here (hi Cloudflare!), even if there are constant paper cuts regarding bureaucracy.
- diceduckmonk 4y ago
  Thanks for the super insightful post. Could you expand on what brokerage means in this context.
michaelteter 4y ago
It’s ridiculous to blame digital nomads. If there is a primary source to blame, it would be Airbnb. This gentrification and tourist problem began well before Lisbon became a DN favorite. Also it’s a global problem as wealth accumulation means individuals and companies can’t find enough places to “safely” put cash. Real estate, especially when it can generate good income, is an obvious choice. Plus, Portugal attracts wealthy Brazilians who want a comfortable, safe, and European home.
- presentation 4y ago
  If Airbnb is the problem then just sounds like supply is out of whack with demand. Sounds like they ought to be building more homes and transport infrastructure to cope with the demand. Though based on other comments also sounds like it’s not the most competent local government.
  - michaelteter 4y ago
    It's not so simple. For one thing, it's a very old city that is already full of buildings. Unless you want to raze buildings and rebuild (the most extreme form of gentrification, and also the way to ruin the historical charm), there's really not place to build new housing. You have to go quite some distance from the city center to find space. And then you need a lot of new transportation infrastructure to make it attractive/possible to get from the new available housing to the city center. And just as it is difficult to build more housing in an already full city, upgrading or building new transportation infrastructure is very difficult and costly (and disruptive for years to the people currently living there). There's really little that can be done to balance things. When "everyone" decides that Lisbon is cool (and it is!), they all want to visit. So naturally any apartment or building owner who can convert from local long term rentals to tourist short term rentals (at many X the price) will just based on the profit potential. And when property companies realized this, they began buying whatever they could - both as a good long term investment in the real estate itself, and for pretty great tourist income. Many places in the US and elsewhere in the world have the same problem.
    - 4y ago
forgotmypw17 4y ago
https://archive.is/fBneE https://archive.is/fBneE
deleted 4y ago
[deleted]
robbywashere_ 4y ago
There’s a comment somewhere about colonialism of the past and irony in this thread but I haven’t found it yet
binaryapparatus 4y ago
Two+ years in Algarve, with registered activity and paying all the taxes here. Having foreign income all my taxes fall within sweet NHR regime. Can't say anything bad about bureaucracy, with proper lawyer help it is slow-ish but very decent process. Lease prices are driven by taxes and tourism, short term (AL) accommodation is taxed at 6%, long term lease contracts go from 30% (for 1+ year contracts) down to 10% (for 10+ years contracts). Obviously landlords are pushed into short term accommodation which creates lack of long term offers. Matter of getting taxes more fair over long/short term categories would fix the market immediately. Quality of life and nice people are above anything else so I wouldn't change a thing from this current setup.
traveler01 4y ago
As a portuguese it blows my mind that "digital nomads" are choosing the country to live in. Surely the country has great weather, food and you get an hefty tax discount that the natives can only dream about (20% of income tax is wayyy lower than a living wage in this country pays). But if you investigated a bit more you would see that the emigration rates of the country are going through the roof. It should be a huge red flag that one "nice" country has more than 20% of it's population living abroad: https://poligrafo.sapo.pt/fact-check/cotrim-de-figueiredo-portugal-tem-mais-de-20-da-populacao-a-viver-fora-a-maior-percentagem-da-ue https://poligrafo.sapo.pt/fact-check/cotrim-de-figueiredo-po... (you might want to use Google Translate on this one). I also saw some comments blaming the tourism for this "bubble" bursting. The portuguese can't complain about tourism since it's a huge part of our PIB.
- capableweb 4y ago
  > Surely the country has great weather, food and you get an hefty tax discount Sounds like you have it figured out why people are moving there :) I think it's always hard for natives to figure out why people want to move to their country, where they see mostly problems and not how much better it is than where the people come from. I'm an immigrant as well, and wouldn't understand why people would move to the country I was born in, but people who are from the place I currently live in feels the same way but vice-versa. Good weather and good food is surprisingly convincing, at least for me, in deciding where to live.
  - traveler01 4y ago
    And if you come living here with a foreign wage, sure makes sense to me. But if you have a "native wage", it's a no go.
    - capableweb 4y ago
      Even with a salary from a Portuguese company, the cost of living is relatively low (compared to other South/Western European countries, and not including Lisbon obviously as it's a outlier [like all metropolitan areas]) so makes sense even with a "native wage". Especially if you work in the IT industry.

105 points by ugurs 4y ago

>Portugal sought to lure them with tax breaks [...] Portugal, then with no taxes on crypto-derived capital gains, fit the bill [...] “We have neighborhoods now that are mainly Airbnb,” said Ana, the Portuguese teacher, “We don’t have our homes anymore.” [...] locals protest against rising costs and gentrification Surprised nobody saw gentrification and rising CoL coming when they invited crypto asset holders and workers who earn several times more than the locals while contributing much less in taxes. Seems like a move that only benefited the Portuguese landlords and real estate owners at the expense of the rest of the population. If I was a Portuguese citizen I'd be pissed at such a decision that prioritizes wealthy foreign crypto and tech bros over its own citizens and make sure to vote those politicians out. Portugal is not Dubai. It can't afford to be a tax heaven with government revenue funded by oil instead of taxes. A country like Portugal should seek to attract businesses and investors who create jobs and pay taxes there, not attract wealth hoarders who dodge taxes and who's only contribution to the local economy is making landlords richer and buying cocktails on the beach. >The center-right Moedas, for his part, said that while clarity on crypto and taxes is welcome, “when you start taxing innovation too soon, you can kill innovation. And so I'm not aligned with the government on this.” Oh please, taxing crypto assets is not taxing innovation. WTF are you talking about? I feel like I'm taking crazy pills when I read stuff like this.

ajsnigrutin 4y ago
This would be no-problem if cities built more houses (especially large apartment blocks) ... well, and outlaw airbnb. I live in a former socialist country that somehow managed to build A LOT of housing in the 70s and 80s, with shitty equipment, but somehow cannot build anything in the last few decades. And not just the government building stuff... normal people could buy a plot of land, get their friends to help, dig a hole and start building... a small loan for bricks and cement, and the basement + a concrete slab was built... then a month or two went buy, and what was left from the paychecks went for a pallet of bricks plus a few bags of cement, and half a floor was made. Repeat for a few years and a house was there... no insulation or a facade, but people could live inside and deal with that later. Papers and permits? As long as you built within some basic rules (far away from the property line and not a too unusual shape), you could basically ignore them, and deal with the "legalization" later. Now you're not allowed to build basically anywhere, papers cost more than the whole material+work did back then, and you're not allowed to do anything by yourself and your friends are not allowed to help anymore. So yeah... good luck.
- ChuckNorris89 4y ago
  >This would be no-problem if cities built more houses "Just build more houses" is not something that scales infinitely. Long commute distances and geography tends to get in the way with stuff like hills, mountains, rivers, lakes, oceans, etc. while demand from foreigners and tourists will stay virtually infinite. At which point do you stop building and say your city can't house more people without ruining the character that makes it a desirable city in the first place? Should we level Lisbon's 2-4 story housing and turn it into a dystopian city with hundred story megablock towers like in Judge Dredd, just so that everyone in the world who wants to move to Lisbon has a place to live there? But then people won't want to live there anymore if Lisbon is just megablocks.
  - slyall 4y ago
    But in this case we are talking about replacing single-story buildings cities with multi-story apartments. Just about every city has plenty of room to build lots of housing via upzoning.
    - ChuckNorris89 4y ago
      > single-story buildings cities with multi-story apartments How many single story buildings does Lisbon have? I don't remember seeing that many. And how many of those single stary buildings are not under UNESCO historical heritage protection laws and you are allowed to buldoze?
      - ajsnigrutin 4y ago
        Lisbon is a large city, not everything is the historic "old" city center. You don't even need to demolish anything, since there is space around, and even if you do, there are a lot of not-historic areas there.
  - ajsnigrutin 4y ago
    You don't need infinitely much, you just need a more than you have now. We have vast areas here (Ljubljana, slovenia) where you're only allowed to build two-story two apartment buildings and nothing more.. and right next to those buildings are large socialist-time apartment buildings with many apartments. But nope, you're not allowed to build higher there. Even in rural areas, we have a lot of empty land, right next to the road, and nope, not allowed to build there, because people who built their houses now complain and don't want new houses there. They also complain if anyone wants to create any kind of business there, and then they complain that there are no jobs there, and that people have to drive to the capital. Look at eg. sillicon valley for example... just building 3, 4, 5 story apartment buildings in areas where there are single-family houses would multiply the usable area for apartments by 5 times, making the buildings larger (combining multiple plots) even a lot more, and since the number of apartments goes up, there is much more potential for investors to offer above-market rates for those plots of land where they could build bigger and higher.

garbagecoder 4y ago

I was just in Lisbon yesterday. I recommend the Lisbon Winery for a lesson in port wine and great food. It’s a nice city, the level of English is high, but it’s not as modern as other European cities. Plus, who wants a horde of cryptobros anyway? What “innovative” about tulipomaniacs? As for Airbnb, that’s the same is most touristy cities and it’s not just because of nomads.

ajsnigrutin 4y ago
> As for Airbnb, that’s the same is most touristy cities and it’s not just because of nomads. Cities should be for citizens... tourists belong in hotels.
- thefounder 4y ago
  What if the citizens want to make an extra buck renting their property?
  - ajsnigrutin 4y ago
    There's a difference between (long-term) renting and airbnb. Just ask the neighbours, who normally don't care about long-term renters and complain a lot about ever-changing tourists and all the issues that brings (from safety to loud parties). You cannot have a factory in the middle of a residential zone, why can you have (what is effectively a single room) hotel?
    - rcruzeiro 4y ago
      I lived from 2014 to 2016 in a really cosy flat with a sloped ceiling in downtown Lisbon. I literally moved away from there solely because the unit beneath mine turned into an AirBnb rental and there were constant loud parties all night long pretty much every other day. Not to mention people leaving the building door open, the rapid degradation of the stairwell with all the tourists dragging their suitcases (and the fact that the parties often extended to the stairwell).
  - 4y ago

Kukumber 4y ago

"digital nomad" how is that a thing, as a society we keep reaching new lows year after year, this is very concerning "repeating past mistakes is our motto"

exhibitapp 4y ago

Not advocating for the influx of "crypto bros" and "digital nomads" but to blame the current wave of inflation on them is a bit ridiculous

Melting_Harps 4y ago
> Not advocating for the influx of "crypto bros" and "digital nomads" but to blame the current wave of inflation on them is a bit ridiculous Good, because this article is about neither but easy to deflect if all you look at is the title; its mostly about the affluent and those who could work remotely (not entirely nomadic as they were already EU citizens) who took advantage of this scheme, here are the most important takeaways that support that it's scope goes beyond either for the issues seen now on PT: > Belgian entrepreneur Jan Deruyck, who moved to Portugal in 2021 with his wife Morgane to build feminine health startup Guud in “full isolation” during the pandemic, is one of them. But a year and a half later, he’s out: “[They have] huge ambitions, but there’s little execution.” > Thank the Web Summit for the visas' shift toward tech workers: It’s “one of the reasons why Lisbon got on the map of Silicon Valley entrepreneurs,” said Armand Arton, founder of the Global Citizen Forum, a members’ club for well-heeled cosmopolites. “Then COVID happened and we started getting calls from wealthy American families saying they wanted a residence permit to enter Europe at any time [regardless of travel restriction]. They got golden visas by investing in technology companies.” > Not to be left out, EU citizens also flocked into Portugal to work remotely during the pandemic, taking advantage of a “non-habitual resident” tax regime that exempts foreign income from taxation and charges a flat 20 percent rate on Portugal-generated revenue from high-value professional activities. Managing a company or working in the technology field can qualify for such activities, making the scheme attractive to digital nomads. I'm a DN and came over during COVID, in the onset PT was on my list, but after the headache I had to deal with the HR government and the sheer incompetence and abject failure to do even basic functions, I realized PT was the same but with the added headache of competing with a much broader scope of people and the longer backorders and growing wait list, the processing time went from 6 months to a year plus for approval because of the influx. Furthermore, the main cities soon started to look like a common tourist traps and all that follows because of the crowds who came over which was one of the reasons I wanted to get out of the US in the first place and ultimately made the decision for me. I'm not surprised locals are pissed, they should be: but they should primarily direct their anger toward their government that because of failed policy, poor economic and investment strategies have made the decades long brain-drain in PT necessary, and in turned hollowed out their entire economy in the process which led to the typical housing and property speculation and consolidation from foreign investment as big as it is, and golden visa schemes the only thing monetarily viable in their country other than tourism. The truth is that Portugal, despite being geographically the most Western of all nations in the EU, is pretty much on par with it's E. European counterparts (made up of former Soviet satellites or fragmented Republics of Yugoslavia) economically, socially and politically so; Digital nomad visas didn't do that, it just made it more accessible in what is actually just a glimpse of what is to come: as the Global population starts to recede (gradually and then suddenly) from it's 8 billion high as more boomer start to die the unfunded liabilities within the system will have already bled it dry in pensions and medical costs and the only thing left will be to compete for citizens with favorable status--Portugal didn't just offer a DN a tax free temporary residence, but full fledged EU citizenship within 5 years with some caveats. It was essentially a longer path toward the Golden Visa that is only offered to those wealthy enough to buy-in their way into passport hunting. Just for context, even Germany (the most non-PIIGS nation) is struggling to keep the hospitals running [0] because of the staff shortages after COVID, and even keeping up with supplies is suffering due to the supply shortages and over-dependence on imported made drugs and devices in a mainly manufacturing country is staggering, and it has been made worse since the invasion in Ukraine due to the cost hikes on everything. 0: https://www.youtube.com/watch?v=075AAaehmN8 https://www.youtube.com/watch?v=075AAaehmN8

alzamos 4y ago

Currently living in the Algarve after moving to Lisbon with my partner for her studies years ago. I know a few non-crypto entrepreneurs who came here for the NHR (non habitual resident scheme - the scheme mentioned in the article which allowed for the 20% tax cap on foreign income). I can confirm that a lot of them were incredibly frustrated with the bureaucracy they encountered, not just when dealing with the government, but generally in everyday life. Most people have war stories related to accountants, lawyers, banks, telecom companies or landlords. The real kicker was when they realised that the 20% didn’t include social security payments, bringing most of them (those that didn’t pay hefty fees to set up companies in tax havens, and pay themselves exclusively in dividends) to an effective rate that wasn’t that far off what they’d be paying elsewhere. Needless to say the expat churn has been quite high. Regarding Airbnbs and rising housing prices - I’m no economist but intuitively, I’ve always thought it made more sense to blame the explosive growth in tourism Portugal has had in the last decade or so (6M tourists visiting Lisbon, a city of 500k people) rather than the 10-20k digital nomads. Would be curious to know if anyone has better numbers or studies.

mancerayder 4y ago
> Regarding Airbnbs and rising housing prices Didn't they recently crack down on Airbnb's, adding requirements that should theoretically lower the drive to turn unoccupied housing into Airbnb's (essentially limiting people purchasing flats with this intention)?
user_named 4y ago
Expats complain about bureaucracy everywhere. A German expat in Sweden will complain about Swedish bureaucracy. A Swedish expat in Germany will complain about German bureaucracy. It does not mean anything. Expats complain about everything.
- AYBABTME 4y ago
  Agreed. Expats don't remember the bureaucracy they had to deal with in their own countries, because they did it: - over the years - step by step - with the help of their parents or simply their parents took care of most things when they were young/born/growing up. Then they arrive in a new country and realize what it's like to administratively become a functional resident. You probably got your first bank account in your teenage, your national IDs as a newborn, etc. Then you move elsewhere and you need to create all these things from scratch and discover them also.

lildata 4y ago

Young Portuguese have been emigrating for the last 50 years. The country is full of second residences, bought by people who took advantage of cheap real estate until recently. Blaming today's inflation and cost of living on a few digital nomads or crypto people doesn't make much sense. What also chocked me when visiting Lisbon or Porto is the number of old abandoned buildings in what I would consider nice areas. I have always wondered what was the reason for that...

whimsicalism 4y ago
> What also chocked me when visiting Lisbon or Porto is the number of old abandoned buildings in what I would consider nice areas. I have always wondered what was the reason for that... Likely property that is inherited to families that emigrated.
whynotmaybe 4y ago
No idea about Lisbon but it was common in Brussels to let an old building "rot" to the point where the owner could destroy it and rebuild a new one. This way, they could build a bigger/better building and sell apartment at higher price than just fix the original building. Demolition permit are hard to obtain but if your building is too decrepit, the city will force you to destroy it.
- deleted 4y ago
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- pjmlp 4y ago
  It used to be common, but then many cities got fed up of it, and now many municipalities have local laws to take ownership for the city if the owners behave this way.
  - alvah 4y ago
    -can't get permission to build due to massive amounts of red and green tape -the only economically sensible option is to let the building fall into disrepair bad enough that the government lets you demolish -governments close this "loophole" by seizing your property and the problem is "the owners behave this way"? FMD.

tiffanyh 4y ago

I wonder how many came via Pieter Levels https://rebase.co https://rebase.co (online immigration service)

FlyingSnake 4y ago
I know about this website as well. Pieter is a smart and maverick businessman and he simply jumped onto the opportunity when he saw one.

PaywallBuster 4y ago

Portugal is heavily bureaucratic and centralized in Lisbon Fire/reduce public servants and spread them away from Lisbon, there, solved! sources: "highest increase in jobs can be seen in central administration" https://www.portugalresident.com/number-of-public-sector-workers-close-to-highest-of-all-time/ https://www.portugalresident.com/number-of-public-sector-wor... https://ec.europa.eu/social/BlobServlet?docId=19963&langId=en https://ec.europa.eu/social/BlobServlet?docId=19963&langId=e... 76% centralized government https://op.europa.eu/en/publication-detail/-/publication/b9bd6909-649b-11ed-92ed-01aa75ed71a1/language-en https://op.europa.eu/en/publication-detail/-/publication/b9b...

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crossroadsguy 4y ago

Lots of Goan friends have finally opted for that "ancestral" Portuguese passport and none of them have any intention of either working or staying in Portugal ever.

louloulou 4y ago
Why would you not get a free EU passport if you could?
- FlyingSnake 4y ago
  One reason could be that Goa has the highest GDP per capita among Indian states and Goans are the richest among Indians. Goa is famous for its Susegad lifestyle and there is relative prosperity in Goa that's not usually present in other regions. However the Goans who leave shores head to UK skipping Portugal altogether.
- crossroadsguy 4y ago
  Well, I wasn’t saying they should not. I was just pointing that out - kind of being in sync with what the post is pointing to. As for not getting EU passport even if you could get that for free, there are too many very common and valid reasons to be listed here. And in fact there are other Goan acquaintances who didn’t want to. So let’s leave it at that.

zeruch 4y ago

I certainly hope so.

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VulgarExigency 4y ago
Same. Digital nomads, leave, go away. They have a negative impact on the economy.

maeil 4y ago

Is this purely a Lisbon thing, or has it exploded over the last 6 months? I visited Porto last spring and there weren't any crowds nor many foreigners, it was pretty quiet.

csomar 4y ago
It's being blown out of proportion for click-bait reasons. The journalist and the people he interviewed are delusional too (ability of Portugal to tax). There is churn even with the tax rebates because of how bad portgual is. This thing would not work with taxes or expensive prices/real-estate. Nomadism is ephemeral. The bubble will pop as soon as the new hottest place comes into the picture.
pjmlp 4y ago
It is everywhere, in all major cities, Porto, Coimbra, Braga,... This year quite a few thousand university students had to give up their place, because they could not find affordable housing.

RagnarD 4y ago

I wouldn’t say Lisbon is an ideal city to settle down in. https://www.air-worldwide.com/publications/air-currents/from-1755-to-today-reassessing-lisbons-earthquake-risk/ https://www.air-worldwide.com/publications/air-currents/from...

rcarmo 4y ago
You should read the article to the end. We get multiple small (i.e., hardly felt) quakes throughout the year that point to a steady release in pressure in the fault.

pjmlp 4y ago

Yeah, affordable living only for the Portuguese that have to find housing on the outskirts and drive one hour to work, because naturally our public transport network isn't that great anyway. Thankfully I got my housing situation clarifyied several years ago.

yieldcrv 4y ago

> Critics “have to understand there is not a dichotomy” between drawing in outsiders and caring for locals. Can confirm, I’ve stayed longer than short term in many cities and am a transplant in all cities. Some places handle it better than others, every place points fingers at a the nearest most visible externality. What they all hardly consider: - their neighbor could have set the rent super high at any point in history, and didnt gamble on doing that then and didnt have to gamble on doing that now. the rent doesnt have to be that high and you can likely peer pressure them into not raising it to its highest acceptable threshold - I dont care what the rent is anywhere, more on this later - anyone that can afford the current rent, set unilaterally by a gambling landlord, is usually paying more than everyone else - and circling back, any unit in any city would satisfy me, so even if I would pay $6,000 in Miami and thats super high, the $1500 place in Austin would remove me from the market, even though thats high to people in Austin (example, I dont actually know, or care) - all together this puts it more so on the gambling landlords in all places, yes there are some tenants that ask for higher rent just to skip the application queue but I would need that quantified

nodemaker 4y ago

Yeah one thing I have learnt in my adventures is that you should never try to do business in a non advanced economy. I keep all my business in the Netherlands no matter where I live.

rcarmo 4y ago

The article is way overblown and borderline clueless. First off, the Luddites demonstrating before the Web Summit had a political backing, they’re not a grassroots movement. That demonstration happened for the cameras (and to further a small party’s ambitions to the limelight). Second, there is indeed backlash against the golden visa program, but the most meaningful bits are due to visas being granted to people who do zero actual investment in the country. As to real estate, this is just the peak of a long crisis brought upon by idiotic zoning laws that favored high-value condos and villas, under pressure from a bunch of lobbyists from the building industry (we have at least two major cement lobbies here, each driven by its own influential family). That, an emphasis on tourism and landlords’ resistance to maintaining or rebuilding existing buildings (partly due to inheritance laws, yes, but mostly driven by greed) has made it impossible to buy new flats in Lisbon even before “gentrification” from techies began. (AirBnB is just another factor in this - a lot of those nice villas and flats are priced outside local affordances, and whoever buys them does so to rent out and drive a quick profit, since a lot of AirBnBs aren’t even taxed…) The only thing the article gets right is that we have a completely bullshit legal and tax system that takes far too long for anyone to sort out - even natives. As an example, it is _much_ less sensible to work as a tech contractor here (unlike, say, the UK) because the fiscal load and legal protection are all stacked against you. Even with “instant company” fast-tracking (which gives you a working legal entity in a few hours, provided you know where to apply to and how to do the paperwork), setting up a business and having official accounting requires some effort for a random Jane/Joe, especially if foreign. But those barriers are fixable if you hire a local relocation/setup service, so real startups and savvy techies can breeze through those. The real trouble comes when you need to do contracts, pay taxes, etc. and there is a legal issue — courts here are slow, Byzantine and can take years to close a case, so brokerage (which can be fraught to navigate) is often the only option. Anyway, the country isn’t broken because a few thousand crypto bros decided to settle in nice villas here. I know of several companies that are thriving here (hi Cloudflare!), even if there are constant paper cuts regarding bureaucracy.

diceduckmonk 4y ago
Thanks for the super insightful post. Could you expand on what brokerage means in this context.

michaelteter 4y ago

It’s ridiculous to blame digital nomads. If there is a primary source to blame, it would be Airbnb. This gentrification and tourist problem began well before Lisbon became a DN favorite. Also it’s a global problem as wealth accumulation means individuals and companies can’t find enough places to “safely” put cash. Real estate, especially when it can generate good income, is an obvious choice. Plus, Portugal attracts wealthy Brazilians who want a comfortable, safe, and European home.

presentation 4y ago
If Airbnb is the problem then just sounds like supply is out of whack with demand. Sounds like they ought to be building more homes and transport infrastructure to cope with the demand. Though based on other comments also sounds like it’s not the most competent local government.
- michaelteter 4y ago
  It's not so simple. For one thing, it's a very old city that is already full of buildings. Unless you want to raze buildings and rebuild (the most extreme form of gentrification, and also the way to ruin the historical charm), there's really not place to build new housing. You have to go quite some distance from the city center to find space. And then you need a lot of new transportation infrastructure to make it attractive/possible to get from the new available housing to the city center. And just as it is difficult to build more housing in an already full city, upgrading or building new transportation infrastructure is very difficult and costly (and disruptive for years to the people currently living there). There's really little that can be done to balance things. When "everyone" decides that Lisbon is cool (and it is!), they all want to visit. So naturally any apartment or building owner who can convert from local long term rentals to tourist short term rentals (at many X the price) will just based on the profit potential. And when property companies realized this, they began buying whatever they could - both as a good long term investment in the real estate itself, and for pretty great tourist income. Many places in the US and elsewhere in the world have the same problem.
  - 4y ago

forgotmypw17 4y ago

https://archive.is/fBneE https://archive.is/fBneE

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robbywashere_ 4y ago

There’s a comment somewhere about colonialism of the past and irony in this thread but I haven’t found it yet

binaryapparatus 4y ago

Two+ years in Algarve, with registered activity and paying all the taxes here. Having foreign income all my taxes fall within sweet NHR regime. Can't say anything bad about bureaucracy, with proper lawyer help it is slow-ish but very decent process. Lease prices are driven by taxes and tourism, short term (AL) accommodation is taxed at 6%, long term lease contracts go from 30% (for 1+ year contracts) down to 10% (for 10+ years contracts). Obviously landlords are pushed into short term accommodation which creates lack of long term offers. Matter of getting taxes more fair over long/short term categories would fix the market immediately. Quality of life and nice people are above anything else so I wouldn't change a thing from this current setup.

traveler01 4y ago

As a portuguese it blows my mind that "digital nomads" are choosing the country to live in. Surely the country has great weather, food and you get an hefty tax discount that the natives can only dream about (20% of income tax is wayyy lower than a living wage in this country pays). But if you investigated a bit more you would see that the emigration rates of the country are going through the roof. It should be a huge red flag that one "nice" country has more than 20% of it's population living abroad: https://poligrafo.sapo.pt/fact-check/cotrim-de-figueiredo-portugal-tem-mais-de-20-da-populacao-a-viver-fora-a-maior-percentagem-da-ue https://poligrafo.sapo.pt/fact-check/cotrim-de-figueiredo-po... (you might want to use Google Translate on this one). I also saw some comments blaming the tourism for this "bubble" bursting. The portuguese can't complain about tourism since it's a huge part of our PIB.

capableweb 4y ago
> Surely the country has great weather, food and you get an hefty tax discount Sounds like you have it figured out why people are moving there :) I think it's always hard for natives to figure out why people want to move to their country, where they see mostly problems and not how much better it is than where the people come from. I'm an immigrant as well, and wouldn't understand why people would move to the country I was born in, but people who are from the place I currently live in feels the same way but vice-versa. Good weather and good food is surprisingly convincing, at least for me, in deciding where to live.
- traveler01 4y ago
  And if you come living here with a foreign wage, sure makes sense to me. But if you have a "native wage", it's a no go.
  - capableweb 4y ago
    Even with a salary from a Portuguese company, the cost of living is relatively low (compared to other South/Western European countries, and not including Lisbon obviously as it's a outlier [like all metropolitan areas]) so makes sense even with a "native wage". Especially if you work in the IT industry.