A law that prevents homes being sold off to clear tax debts has been passed by the Portuguese parliament.
Approved by Socialist, Bloquista and Communist party MPs the decree law now has to be approved by the President of the Republic, Marcelo Rebelo de Sousa.
The long-awaited law will protect those who have fallen into debt and allow them to stay on in their homes without the gnawing fear that the State will seize their property.
The law, when passed, does not mean that homeowners are excused their debt to the State but they will be given time to repay debts, just like those who live in rented property.
Nearly 5,900 families were kicked out of their homes between 2014 and 2015 due to action by Portugal’s tax authority under the Passos Coelho coalition regime where money came first and families second.
Property is the main asset seized and sold off by the tax authorities, often auctioned off for a low percentage of its market value in a system that breeds corruption and lacks transparency, competition and good sense.
The Socialist proposal was for a ban on property seizure and subsequent sale to settle tax debts, unless the debtor has a high value home with a patrimonial value (valor patrimonial) of over €574,323. This prevents those with money intentionally converting their assets into a single high value residence. Owners of more expensive properties will be given a time period during within which the property may be sold by the owner, not sold off by the State at auction.
The Left Bloc pointed out the scale and folly of the State system that leaves many families homeless or State-dependent.
The Tax Procedure Code ruled that the State first seizes bank accounts, bank deposits, then assets such as cars and finally, real estate. In practice this was not happening with an avaricious, target-driven Tax Authority keen to seize and sell property to clear debts in one hit.
The new law covers any current seizure action and will alleviate over 1,100 families on the point of losing their homes.
One of the insidious aspects of the Tax Authority’s operating procedure is the bonus shared with managers and staff who profit from so called ‘coercive collections.’ This incentivises seizure of goods and property as there is no bonus due for debts where agreement is reached for staged payments.
Comments