The latest Left Bloc idea to disrupt the property market is to impose a special rate of income tax on people who buy properties, often spending time and risking money in doing them up, then selling them on for a profit “within a short space of time.”
Bloquistas are negotiating with the Government to create an IRS rate for "those who buy and sell in a short period of time with a lot of profit" in a move to end, what leader Catarina Martins calls, “real estate speculation.”
The aim is that "those who buy and sell in a short period of time with a lot of profit" pay "a particular IRS tax penalty," said Martins.
This is but one of the proposals that are being discussed in preparation of the 2019 State Budget.
Martins also wants a decrease in VAT on electricity and an increase in pensions as early as January next year, which few would disagree with.
"One of the biggest problems the country has at the moment is the price of housing," which "is currently suffering the pressure of a speculative bubble," according to the politician.
The Left Bloc, said Catarina Martins, 'is negotiating the tax rate details with the government' but seems unconcerned that estate agencies will see a dramatic drop in activity and tens of thousands of risk-taking citizens that make a living from the property market, buying, doing up and selling properties, will stop doing so if high taxation makes this unprofitable.
Catarina Martins, along with many politicians, often has been criticised as only seeing the world as it relates to Lisbon.
Much of her ire is directed at Lisbon City Council member Ricardo Robles, a Left Bloc member, who resigned following a controversy involving a building in Alfama that he bought for €347,000 and was selling it on, after significant refurbishment, for €5.7 million.
For the Left Bloc leader, the application of a special IRS rate on this type of property transaction will have three positive effects: "On the one hand, it halts the speculative bubble, on the other hand it will raise revenues for the State, and thirdly it helps control housing prices."
The reason why few property owners vote for her party becomes clear, "It is necessary to penalise those who buy real estate to sell shortly afterwards with a lot of profit because it is the only way to stop the speculative bubble," said Martins, stressing: "We can not pretend there is no speculative bubble in Portugal."
Those living in rural areas and much of the country outside Lisbon, Porto and certain hot spots in the Algarve, would disagree.
There is no mention from the Bloquistas as to a hike in tax rate for companies involved in this activity, always an option for those involved in the property market.
Comments
Populist governments dully tax their profits to punish their evil deeds.
What they don't do is attempt to bring housing prices down, or at least control the rise, by allowing more construction.
Ask any property investor / developer / exploitative speculator; why don't you just build more homes for the poor [or whoever wants to buy it].
Lack of space? No.
Lack of available capital? No.
Lack of building permits? YES.
Housing shortages, and the corresponding rise in prices, is not caused by those who build, invest, and sell the properties.
It's caused by government choking the permit process, largely to prevent excess profits by those nasty 'speculators'.
Now, who wants to discuss rent control, and the resulting lack of affordable residential rental property?
Non-residents already pay 28% capital gains tax, locals pay 14%.
can they never be satisfied with what they tax already, or is the like the person who drinks salt water they want more and more