President enacts higher municipal taxes for vacant buildings

By TPN/Lusa, in News · 10-05-2019 09:00:00 · 0 Comments
President enacts higher municipal taxes for vacant buildings

Portugal’s president, Marcelo Rebelo de Sousa, has enacted higher municipal tax on real estate (IMI) for vacant buildings in areas of urban pressure, even though its effectiveness raises doubts.

“Despite the doubts it raises, in terms of weighting and effectiveness, considering that the new regime stems from the state budget law for 2019 and which still mitigates its effects, either by extending the intervention of the interested parties, or by recognising several situations that hinder its application, the president enacted the order, which aims to cope with housing problems in pressure zones,” according to a note published on the presidency’s website.


The government’s order, approved in a cabinet meeting on 14 February, establishes as urban pressure zones “areas where demand is much higher than supply or in areas where the financial capacity of people is far below market values.”


The country’s minister of environment and energy transition, João Matos Fernandes, said at the time, regarding vacant buildings in urban pressure zones, “municipalities can increase the tax from the second year the property is unoccupied, up to six times the current rate and thereafter apply 10 percent more each year.”


According to Fernandes, the municipalities have “increased and speedier powers” to act on vacant buildings and in poor condition and if there is no reimbursement from the owners regarding the works, the municipality may “forcibly lease the value owed by the works.”


According to this programme, landlords are to benefit from a total exemption of real estate tax, which is applied to contracts lasting at least five years, if the rent is less than 20 percent of market prices and the renters do not have to spend more than 35 percent.



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