The opposition Social Democrats (PSD) wants to scrap the new tax laws that raise rates for multiple property owners.
The so called 'Mortágua tax,' that over 200,000 taxpayers will have to pay in September, "corresponds to an attack on savings, an attack on investment, an attack on the middle class."
The PSD said it will propose that the additional Municipal Tax on Real Estate is removed from the legislation and that the ‘Mortágua tax,’ named after Mariana Mortágua - the Left Block MP who announced it, can not be justified as the country no longer is subject to harsh austerity rules.
"In the state budget, we will propose its elimination, the country is already burdened with taxes," said Social Democrat deputy Duarte Pacheco.
The new property tax is for people with properties that have a combined valor patrimonial tributário (VP) of over €600,000. Pacheco said that, “if austerity has ended, if the emergency period is over, there is no reason, other than an ideological reason for its imposition,” and blames the influence of the Left Bloc on this Socialist Party initiative.
The new rules will hit 211,690 taxpayers in September and will raise around €130 million in additional revenue from the multiple property-owning classes, Qualifying owners will have to pay a rate of 0.7% on real estate whose value exceed €600,000 and 1% on real estate with a combined VP of €1 million plus.
The PSD voted against the creation of this additional tax and warned that the collection of the tax will deter "potential investors, those who were returning to Portugal to make Portugal a dynamic real estate market ... others may depart to other countries.”
For Duarte Pacheco the new tax does not make sense, "once again, the middle class is called to contribute tens, hundreds of thousands of euros to the State coffers, it is the price that the Socialist Party pays to the Left Bloc to stay in power.”
Many couples are being sent enhanced IMI tax demands by the Tax and Customs Authority and only now realise that they should have filed a declaration to the Tax Office that allowed them to escape the new tax.
Many people had thought that they were safe from this tax because they were married and would therefore benefit from a tax exemption of up to €1.2 million - not so, unless ticking the right box beteween April 1 and May 31 to exercise the option of joint taxation, thereby doubling the amount of the exemption.
Only 3,479 couples did this and now are complaining that the Tax Office failed to inform them of the impact of the coming tax change.
See also: 'Higher taxes for 211,000 property owners in Portugal'
Comments
Despite the historic communist despise of landlords, returns on residential rental in Portugal are already less than thrilling.
This tax would take a huge bite; If profits are 3% [and they're likely less than that], a 1% tax on the capital base would be a 30% additional tax on profit, on top of the stiff taxes already imposed.
Inevitably, renters will have to shoulder that cost.
Taxing the rich is always popular; but this tax misses the target.