New property tax controversy

By Brendan de Beer, in News · 22-09-2016 13:42:00 · 1 Comments
New property tax controversy

The normal route might have been for Finance Minister Mário Centeno to unveil a new proposed property tax on 15 October along with the 2017 budget proposal. Instead, Left Bloc MP Mariana Mortágua this week took the lead and publicly released plans of new wealth tax on real estate. The proposal was disclosed as the real estate market, one of the biggest victims of the financial crisis in Portugal, showed signs of strong recovery, with average property prices recording yet another increase, rising 6.3 percent during the second quarter of 2016.

The proposed tax is aimed at revising annual property taxes and will see homeowners taxed in accordance with their real estate portfolio.
Mariana Mortágua, who is fast becoming one of Portugal’s most notable politicians having just turned 30, was targeted this week from several quarters after revealing details of the property tax which will be contained in next year’s budget.
Families or investors whose accumulated property amount to more than 500,000 euros, are the target of the new tax.
The planned tax has been criticised by the opposition, tourism officials and real estate associations, mostly as they argue it will scare off potential investors.
But Mortágua said later that should the new property tax come into force, it will only affect 43,000 taxpayers.
“We are only speaking of one percent of the population, the wealthiest”, she said on Wednesday evening, while also justifying her actions in breaking the news to the public.
According to the Left Bloc MP, the announcement of the new property tax was made in agreement with the government, and was not a cheap trick to gain additional prominence for herself and her party.

The first fortnightly debate of the post-summer legislative period is expected to be rather heated, with the issue of property tax featuring on the agenda for this coming Friday’s parliamentary session.
Earlier in the week, both the Social Democrats (PSD) and the People’s Party (CDS) reacted to Mariana Mortágua informing the public of the new tax.
“It is about time the Prime Minister restores order”, said CDS MP Nuno Magalhães in reference to Mortágua speaking on behalf of the government, while PSD spokesperson Jorge Moreira da Silva also went on the attack.
“I warned during election campaigning that we should not have the leaders of the Communist Party and Left Bloc as deputy prime ministers. But I never imagined that Mariana Mortágua would assume the role of finance minister.”
Associations representing Portuguese estate agents, construction companies and property owners have in the meantime also joined in criticism of the proposed tax.
The tax will be progressive and be levied alongside the Council Tax (IMI).
Luís Lima, the president of the APEMIP estate agents’ association, said the tax is an “attack on the middle class, even if it appears to be an attack on wealthier property owners”, adding it would result in the “death of the urban rental market”.
“The only ones who will not be affected are precisely the rich, who have the capacity to distribute their various assets in such a way that they will never be affected.”
The Portuguese Confederation of Construction and Property (CPCI) in comments to Lusa News Agency said that the debate on the 2017 state budget “could not have started in a worse way” and expressed regret at what it called “political strategies” resulting in an “increase in taxation on families, the reduction of investment and serious effects on economic activity.”
Similarly, the Algarve’s largest hotel association AHETA has slammed the proposed tax arguing it would scare off potential investors, particularly in the residential tourism market.
This Friday’s parliamentary session is meanwhile set to be dominated by property taxes.
The PSD and CDS have tabled a request to examine the government’s intention to tax properties in accordance with their solar exposure, views and location close to amenities as revealed at the beginning of August, with the latest wealth tax set to also feature heavily the session.



Comments:

It's about time this kind of tax be leveled against the wealthy, who are not paying their fair share.

by Horta from Other on 23-09-2016 05:00:00
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