A week of news and views from the Algarve...
Portugal’s Finance Minister has co-signed a reversal of the tax exemption rules for many Finnish retirees resident in Portugal. Many will lose the generous tax breaks on private pensions, currently allowable under the non-habitual residency rules.
Finns already are on notice in Spain where they have a period of three years before their private pension incomes will be taxed. The same period of grace has just started in Portugal.
The Dutch government has complained that Portugal, by setting up and promoting tax-exemptions for certain categories of retired foreigner, is operating a ‘tax haven within the European Union’ and there is some sympathy for this opinion with other governments now looking at the legislation, especially France.
The argument for a continuation of the tax-friendly scheme is that qualifying expatriates have more to spend on local goods and services that attract VAT, and that they pay tax on one-off items such as property and new cars.
The argument against, and one with which the current Socialist government may be in accord, is that local Portuguese pay up to 48% in income tax and then pay VAT of up to 23% on goods and services while many retired incomers can pay zero tax on their private pension incomes.
This tax exemption situation reminds me of the ‘offshore property ownership' scheme that for years was promoted to foreigners buying in Portugal and then, when enough people were in the net, the rules abruptly were changed in 2003 under a Social Democratic government, with many residents paying thousands in tax and fees to enable them to stay in their own homes.
If these foreign private pension taxation deals are ended, and perhaps we are seeing the beginning of this process with the end of the agreement with Finland, the local property market almost inevitably will suffer.
Countries that offer tax advantages to foreigners over locals sit awkwardly in a European Union that increasingly strives for harmonisation.
On the plus side, Portugal has been voted 'the best golf destination in the world.'
Who would have thought that the Stilwell family back in the late 60s was sowing the seeds of the Algarve’s success by building what is now the Penina Hotel and Golf Resort.
The golf market is a mainstay of the Algarve’s off-season tourism yet there are so many others ‘niche markets’ that, given expertise and exposure, also can become significant contributors to the region’s success.
Good progress has been made in the hiking market, mostly through private enterprises along the Alentejo west coast getting it together, and the undeniable attraction of the Via Algarviana hiking trail across the region which grudgingly has been supported with a further year’s funding from local councils.
The cycling market needs urgent attention with the Secretary of State for Tourism, Ana Mendes Godinho, talking a big game but failing so far to sort out the rag-tag of the Algarve’s EcoVia cycling route which remains disjointed and much of it in disrepair.
It is a continuing mystery as to why these and many other market segments are not being consolidated and effectively promoted, how hard can it be?
The demand for the Algarve’s tourism mainstay, hotel-based ‘sun and sand’ holidays, continues unabated with older hotels now being renovated.
One hotel project that went bust, has just been bought.
The ‘W Algarve’ hotel is to be pitched at the super-cool and is a brand of the Marriott International hotels group. The derelict project is that hideous cement skeleton on the south side of the coast road between Galé and Sesmarias, Albufeira.
The knowledge that an hotel will open at this site in 2018 has caused delight in the neighbourhood.
The publicity blurb is a bit heavy on ‘sea-front’ location for the apartments that will be offered for sale, as the development is 500 metres from the sea but it's a prime location nonetheless. We wish the project all success.
One city whose council thinks it knows all there is to know about tourism, but lacks the necessary insight, is Olhão where locals are gearing up for next Tuesday evening’s public meeting with council grandees and the Lisbon architects whose plans for the historic city centre have caused such horror.
Local media, national media and TV have reported on the council’s plans and have been supportive of those locals who will have to live with any of the 'abhorrent' changes to the city’s historic centre.
The public meeting seems deliberately to have been booked in a room that holds only around 100 people and the mayor, now under pressure from all sides bar his own, has reached the stage of believing that everyone is lying except himself and that no one has even studies the plans.
It’s show time next Tuesday when councillors and the Lisbon architects from Baixa Atelier will face informed opinion from many less than impressed locals, some of whom stand to have their properties seriously devalued by the council’s plans.
On this topic, the Portugal Resident on Saturday night reports on an inteview with Mayor Pina:
Faro council mayor, Rogério Bacalhau, seems to have come over all bashful and has decreed that the famous Euro Vagina roundabout near the prison is to be levelled and a new, flat and far less interesting one is to be created in its place - at the eye-watering cost of €40,000.
There is nothing wrong with the old roundabout and the excuse that ‘people cannot see around it’ is not a good enough reason as drivers have a good line of vision and the roundabout is no more an accident spot than any other.
The conclusion therefore is that Bacalhau may be concerned at the roundabout’s nickname, but by ordering the Euro Vagina’s destruction, he has made the mounded structure more famous than if he had left well alone.
Up in Monchique the ever-tolerant mayor, Rui André, is less than happy with the bill he has had to pick up for reopening the local court.
In typical fashion, André has just got on with the job of repairing the damage caused by the State-sponsored vandalism when the court was stripped of fixtures and fittings.
Monchique court’s closure was ordered by the former Justice Minister Paula Teixeira da Cruz whose altered ‘judicial map’ slowly is being reversed by the current government under the more sober auspices of the current minister Francisca van Dunem.
Monchique taxpayers are having to stump up for a €50,000 repair and renovation bill for the court building, an extraordinary expense that the council has had to cover to ensure the court’s timely reopening in early 2017.
This sum is regrettable but necessary as the court used to be the municipality’s second largest employer and its reopening will breathe further economic life into the town.
Portugal’s Prime Minister, António Costa, has delighted environmentalists by travelling to Morocco to attend the rather grand sounding ‘22nd second session of the Conference of the Parties (COP 22) and the 12th session of the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol (CMP 12).’
The result was less complicated than these conference titles as Costa later stated: "Portugal reaffirms its firm commitment to be neutral in terms of greenhouse gas emissions by the end of the first half of this century."
One of Portugal’s environmental associations, ZERO, said it was now necessary for the government “to focus on renewable energies, energy efficiency, public transport, electric mobility, and a sustainable forest strategy,” while congratulating Costa for heading down the right road to reduce CO2 emissions.
The PM’s rather sudden green hue seems at odds with the government’s mishandling of the oil and gas exploration licences granted to Portfuel in the Algarve. These are the two deals that cover most of the region’s landmass, signed by the government fuels authority (ENMC) that seemed to be working for the oil sector, and the former Minister of Environment, Territorial Planning and Energy, Jorge Moreira da Silva, whose reputation as an environmentalist now lies in tatters.
Despite plenty of opportunity to cancel the Portfuel contracts, the government has let a key deadline slip past, leading Sousa Cintra to conclude that he can press ahead with his exploration programme in the Aljezur and Tavira blocs.
The local millionaire says he can’t see what all the fuss is about as discovering oil or gas would be good for the country and anyway no harm will be done to the environment – a view not shared by the thousands of locals who have signed petitions to protect the Algarve’s land and sea from the threat posed by a nascent hydrocarbon industry.
As for the Algarve’s offshore oil and gas blocs, energy company Partex, the one whose profits go to fund Portugal’s Calouste Gulbenkian Foundation, has decided enough is enough and there are plenty of other places it can go to look for oil.
In a bitter speech, Partex boss António Costa Silva blames public opinion for the stiff opposition the oil company has encountered. Describing the “hostile and adverse environment that exists in the country in relation to oil and gas prospecting,” the oilman is miffed that a usually complicit government has been affected by what voters want, rather than what Partex wants.
This climb down marks a victory for the people and one can only speculate that the Gulbenkian Foundation’s trustees decided that the damage to the foundation’s reputation would only become more pronounced.
It has been impossible for this grant-giving organisation to justify funding projects such as the Oceans Initiative while receiving profits derived from an oil business which, however carefully it operates, damages the environment in which it works.
António Costa Silva’s assertions, such as "Do not think that offshore wind energy will be developed without the technologies of the oil and gas industry, which launched all of this development", show a graceless loser.
The sorry tale of a featherless eagle, (nicknamed ‘Reg’), has a happy ending and one can’t help but wonder at the skill and kindness shown by the wildlife team changed with looking after Portugal’s ever-growing Iberian Imperial Eagle population.
This large bird of prey, one of the most endangered species in the world, can grow to a wingspan of nearly seven feet (just over two metres) but was thought to have left Portugal for ever until 2003 when a nesting couple was spotted. There were 15 couples nesting in Portugal this year, producing 18 chicks.
Thus, Reg is a very important bird and his successful treatment in Lisbon has enabled him to be released in the Guadiana Valley near Mértola to do what eagles do best...
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