The Bloco de Esquerda political party has presented a bill to prohibit the sale of real estate to citizens or companies with headquarters or permanent residence abroad, as a way to combat the increase in prices in the real estate market.
According to the party, this measure – which, in general terms, was recently adopted in Canada – aims to “combat rising prices with housing”. In the articles of this diploma, BE points out, however, that this prohibition would not apply to “Portuguese citizens with their own and permanent residence outside Portugal”, nor to asylum seekers or immigrants with a permanent residence permit.
“Real estate transactions in low-density territories” would also be excluded, as well as “foreign citizens who acquire a property, in co-ownership, with their spouse or a de facto partner”.
In the explanatory memorandum for the bill, the party led by Catarina Martins argues that, "in Portugal, the fundamental right to a house has yet to be fulfilled". Bloco de Esquerda advances with statistics according to which, between 2010 and 2022, house prices “increased by 80% and rents rose by 28%”, causing residents in Portugal to spend “a brutal percentage of their income on the house”.
Despite acknowledging that the “housing crisis is not unique to Portugal”, the BE considers, however, that “Portuguese governments have only exacerbated this trend, with their policies of privilege and inequality”. According to the party, the “process of gentrification and financialization of housing motivated the mobilization of citizens and local authorities in several European cities”, causing legislative changes at an international level.
Among the examples cited in this bill, the BE mentions namely that, “in Canada, the Liberal Party government prohibited the sale of residential buildings to foreigners, a measure that had already been implemented in New Zealand and that, recently, will also be a reality on the islands of Ibiza, Mallorca and Menorca”.
“The defenders of these measures, whose application has been hampered by the power of real estate interests, invoke the same argument: competition from financial capital makes house prices unaffordable for local citizens”, reads the bill.
For BE, “if this is the reality in Canada, the Netherlands, Germany or Catalonia, it is more so in Portugal, where salaries do not compete, neither with the financial power of investment funds, nor with personal income attracted by golden visa regimes, tax benefits for non-habitual residents, or cryptocurrency speculators”.
The party also adds that these international experiences demonstrate that "the process of real estate inflation requires exceptional measures, aimed at protecting the right to housing".
Much easier solution,ban all Airbnb rentals.That will overnight free up huge amounts of properties that have simply wrecked the long term rental markat and distorted house prices.
Furthermore the tax break given to Airbnb landlords are an outrage to the ordinary working people of Portugal who have to start paying taxes on the first euro earned.
Talk is cheap,actions speak louder than words.I offer a sensible and very fast solution
By James from Algarve on 23 Jan 2023, 14:09
Raise Portuguese salaries!
If ten million new houses were available to millions of people being paid peanuts, the houses would stay empty.
You can't live in / maintain property on the poverty line. You end up with more ruins.
By Joe from Alentejo on 23 Jan 2023, 17:10
I totally agree! Regulation of the real estate sector is a pressing necessity considering the circumstances.
By Cris from Açores on 23 Jan 2023, 19:25
Of course, let's ban ALL Airbnbs so that NON RESIDENT foreigners can still buy their second/holliday houses according to their heart's desires. Forbiding the sale of second houses to foreign non residents would also free, overnight, a ton of houses that could provide a roof over the heads of both the Portuguese who need a place to live AND the immigrants who are coming to the country to ACTUALLY LIVE AND WORK . Whatever in the world has given certain people the idea they are entitled to have a second home in a country they don't even live in????????!!!!!! I too am apawled! I also find it apawling the tax benefits given to non resident retirees of certain nationalities (if you don't know what I'm talking about, Google it!). That being said, certain areas of the country certainly need A LOT more restraint in AL permits, but banning everything would be much more damaging to the LOCAL citizens (Portuguese and otherwise) than banning the sale of second houses to people who DO NOT EVEN LIVE HERE and that is also distorting the market ENOURMOUSLY. Therefore, regulation is needed here as well. But, judging by your comment and tone of it , I guess you are more interested in protecting the entitlements of certain people than anything else, aren't you James? I certainly don't believe you're that worried about the locals. Like you said, talk IS cheap! The solution presented here is even more sensible and faster to implement.
By Cris from Açores on 24 Jan 2023, 20:04
NZ did the same some years back. House prices fuelled by overseas buyers, mainly China, were nipped overnight. Then came the cheap money, and hey presto, house prices galloped away like a race horse with a cracker up its backside.
By Ian from Beiras on 25 Jan 2023, 07:14
cheap money has not helped. limit borrowing to a simple multiplier, ie 3x salary. introduce non resident tax and second home tax. there are plenty of well off Portuguese buying 2nd, 3rd and 4th homes that help inflate prices. these too need to be taxed accordingly. we have several holiday homes, owned by Portuguese families, near us. those homes get used less than 1 month per year. it ain’t just foreigners driving the housing price boom!
By Ian from Beiras on 25 Jan 2023, 08:14
Interest Rates have risen drastically in recent months. This is designed to reduce inflation, and to drive down property prices. Let the interest rate increases take effect. Property price rises and falls run in cycles, and Portugal property (like many other countries) is due a downward adjustment.
Portugal is a very desirable country for many reasons, and its future is looking very bright. Whether you like it or not, it is heavily dependent on tourism and foreign money. Until there is a proper long-term solution to this, and better pay for Portuguese citizens, badly thought-through knee-jerk measures that will cause long term economic damage are not the answer.
By Paolito from Algarve on 25 Jan 2023, 12:17
Where I live and from what I witness around me the price boom is mostly being driven by foreign non residents, but I don't agree with second houses that aren't given a proper use anyway, weather they are purchased by foreigners or not. Maybe Portuguese are buying second houses to turn them into a short term rental or as a weekend house. In those cases, proper regulation and proper taxation is required. But having houses that are empty for months and months during the year is a shamefull situation. Probably, the house race that happened in New Zealand could be avoided somehow, if other countries decide to implement the same measure. I'm guessing they were the first ones to do adopt this ban and it's a sort of experiment, eventual mistakes they might have done could be corrected by others ( a learning curve). Also, one shouldn't rule out the possibility that it might take a fair amount of time (several years) before results start to show. Meanwhile, I think all sort of measures might have to be implemented: regulation, taxation, high rates, etc. We musn't forget the world's population is growing at an extraordinary rate puting even more pressure on the market, because everyone needs a roof over their heads. Unfortunately, I think a challenging future, to put it mildly, is on the cards and this will require people's generosity, empathy and a reevaluation of their wants vs needs. Do people really need a second house, no matter where, if it's here, Congo or Papua New Guinea , when they, in fact, live in another country??? Please....
By Cris from Açores on 25 Jan 2023, 13:21
Just one more reason the vast majority of Portuguese don t vote for them.
By Peter Kirby Higgs from Lisbon on 22 Feb 2023, 15:58