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From Open Doors to Deportations: Portugal Now Wants Portuguese, Not Immigrants

National News,  Immigration
immigrants leaving
By The Portugal Post, The Portugal Post
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Portugal has spent a decade luring foreign cash: Golden Visas, digital-nomad permits, non-habitual residency discounts. Now the script has flipped. Faced with record emigration among 20- and 30-somethings, Lisbon has unleashed a trio of aggressive perks aimed squarely at keeping its own talent rooted in the country.

100 % financing: the State becomes your co-signer

One of the major steps to keep young Portuguese in the country is the new Public Guarantee scheme. Under this plan the government now covers up to 15 % of a loan’s value for the first ten years, enabling banks to lend the full 100 % purchase price on homes costing up to €450 000. Eligibility is restricted to residents aged 18-35 with taxable income below the 8th IRS bracket and a clean debt record, but the effect is dramatic: the traditional 10–20 % cash deposit has disappeared overnight.

Zeroing-out transfer taxes on a first home

Also, the same legislation sweeps away the Municipal Transfer Tax (IMT) and the 0.8 % Stamp Duty for first-time buyers under 35. On a €250 000 flat that means an immediate saving of roughly €8 500—money that would otherwise vanish before the keys even change hands. The exemption kicked in on 1 August 2024 and applies nationwide, regardless of property location.

IRS Jovem (Young IRS) 2.0: a decade-long income-tax holiday

To benefit its young generation, Portugal’s youth-tax programme has been super-sized. From the 2025 tax year onward, workers up to age 35 enjoy:

- Year 1: 100 % of salary exempt

- Years 2-4: 75 % exempt

- Years 5-7: 50 % exempt

- Years 8-10: 25 % exempt

The relief is capped at 55 × IAS (€28,737.50 in 2025) per year but now stretches over ten years instead of five, giving graduates a far longer runway to build savings before full taxation kicks in.

Why officials call the shift “extreme”

Roughly 30 % of Portuguese born between 15 and 39 already live abroad, a brain-drain that the new coalition says threatens economic growth and social security balances. By scrapping upfront barriers—both the down payment and the transfer taxes, ministers hope to convert would-be emigrants into homeowners, the demographic least likely to leave.

Early signals of impact

Mortgage brokers report a spring surge in applications from buyers under 30, and three of the country’s five largest banks have signed on to the guarantee. Treasury officials say more than €600 million in state-backed housing credit was approved in the scheme’s first two months—already a quarter of the annual envelope set aside in the 2025 budget.

Portuguese couple buys home

Historical Open-Door Strategy—and Its Costs

For most of the 2010s Portugal fought youth emigration with the opposite tactic of luring capital and taxpayers from abroad. The flagship was the 2012 Golden Visa, a residency-by-investment programme that poured billions into bricks and mortar before its real-estate option was finally abolished in October 2023. The tax side was covered by the Non-Habitual Resident regime, a ten-year holiday that stopped accepting new applicants on 1 January 2024. Even so, the exodus never really slowed: in 2013 alone an estimated 110 000 Portuguese—many in their twenties—left the country, the biggest single-year flight since the mid-1970s. Meanwhile the policy mix succeeded so well at drawing outsiders that the foreign-resident population has doubled to roughly 800 000 in a decade, tightening pressure on housing in the very cities young locals were abandoning.

Street Pressure Forces a Rethink

By early 2024 rents in Lisbon and Porto had outpaced graduate salaries, and the slogan “Casa Para Viver—a home is for living, not speculation” began appearing on banners from Braga to Faro. September’s nationwide demonstration drew thousands into Lisbon’s streets and nineteen other cities, making housing the dominant theme of the 2025 election. Politicians responded with the Mais Habitação law. Among other curbs it froze fresh short-stay licences in urban hotspots, cut the lifetime of existing permits to five years and capped the starting rent of most new leases at only two percent above the previous contract. Overnight, the message to investors shifted from “come in” to “slow down”.

Restricting Inflows Becomes Policy

The clamp-down is now explicit. Under Lisbon’s Action Plan for Migration the popular “manifestação de interesse” back-door to residency vanished on 4 June 2024; would-be migrants must arrive with a signed work contract or university place in hand. Draft rules circulating in parliament would raise the digital-nomad visa’s income threshold to four times the minimum wage—about €3 480 a month in 2025—and limit renewals, narrowing the window for remote workers who rely on Airbnbs. Even the Golden Visa, though technically alive, now steers money only into affordable-housing or cultural projects, not private flats.

Retention Carrots for Locals

Against this backdrop the new 100 % mortgage guarantee laid out in Decree-Law 44/2024 reads less like a giveaway and more like a strategic pivot. By covering the riskiest 15 % of the loan for a decade, the state removes the deposit hurdle for buyers under 35 on homes up to €450 000. The simultaneous abolition of transfer tax and stamp duty on a first home ensures those buyers keep thousands in their pocket for furniture—or for staying put. And the expanded IRS Jovem, whose ten-year tapering relief effectively lets fresh graduates escape income tax during their highest mobility years, turns home ownership into an anchor rather than a springboard.

Hardening of Asylum and Regularisation Procedures

The shift toward keeping Portuguese at home has been matched by an equally forceful effort to reduce the number of newcomers who lack a firm legal foothold. Portugal’s new Migration Agency, created to clear a backlog of around 400,000 residency files, has begun re-screening cases and issuing departure letters: the first batch of 4,574 migrants were told in mid-May to leave voluntarily within twenty days or face deportation, with ministers warning that up to 170 000 people could receive the same notice in coming months

Bottom Line

In less than two years the country has reversed a decade of open-door orthodoxy. Big carrots to stay are now paired with big brakes on fresh arrivals. Whether that two-pronged approach can tame prices without freezing investment, and whether the dispersed diaspora feels enticed to come home, will decide if 2025 marks a brave correction or an expensive detour.