An estimate that over one million properties may have their rates bills raised is contained in a proposal by the 'Group of 12' economists reporting to socialist party leader António Costa.
The Algarve would be hard hit along with Sintra and Cascais (pictured).
The estimate is that 19% of Portugal’s housing stock could be designated as second properties, around 1.1 million houses and apartments, which are not being used permanently by their owners.
This figure is based on Portugal’s 2011 Census and the group of 12 economists, invited by the socialist party leadership to present macroeconomic scenarios for Portugal to 2019, have proposed the initiative as part of António Costa’s socialist party manifesto to be released in June.
The purpose, according to the carefully chosen egg-heads, is to increase the supply of rental properties and to fiscally penalise properties which are not being used as they are holiday homes or weekend homes with a seasonal or secondary occupation.
As only a small percentage of these properties are registered as 'Alojamento Local' to enable their legitimate rental, the economists concluded with breathtaking accuracy that some of these properties may be being let out illegally.
According to the 2011 Census, the areas of the country with the most second homes are Lisbon (35,000), Loulé (29,000), Albufeira and Almada (21,000), Sintra (17,000) and Cascais (14,000).
The gloomy president of the Lisbon Owners Association, Luís Menezes Leitão, commented that he of course was concerned about the economists’ proposal, and that "a measure like this would cause the collapse of the industry."
Many owners already have had whopping rates rises recently and a further hike would be "a serious problem for homeowners in seaside and weekend home areas such as the Algarve, Sintra and Cascais," according to Leitão.
The economists did not firm up on a figure for rates rises on second homes but suggested a surcharge of up to 1.5% of the property value.
Comments
Ed - in the UK, in broad terms, holiday homes or second homes are liable to the standard local council's rates bill, SUBJECT TO a discount of up to 50% at the local council's discretion.
Marcel is therefore incorrect as far as UK property is concerned - an owner of a second or holiday home usually pays less rates (IMI) on the second property, not more.
A decision to increase IMI tax in Portugal on second homes may well appease socialist voters, but as is often the case with misguided politics, more, often ends up being less - look at the tolls as a wonderful example.
Simple economics, unfortunately not understood by lefties the world over
In the UK I believe the rates are the rates, whether the home is first or second. The tax treatment is different on sale with CGT set at zero for first homes but charged on second
Moreover, this is a socialist agenda - and people with second homes would typically not be socialists, so from their point of view they probably will gain votes rather than lose any.
bubble gum, the Portuguese way, did they not read
the story where ''more Portuguese are dying than
are born'' if this keeps going as well as the exodus
of the brain drain overseas there won't be anyone
left to pay any taxes, hey Mr Costa, better start
handing out the bubble gum.
To drastically reduce the Portuguese public sector tax bill - put them all on zero hours contracts. If their job actually exists and they are doing something constructive for the Portuguese economy or society, or like the Police and judges, stopping someone doing the opposite, damaging this countries economy or society; then you get paid. Simple!
Many of the municipal jobs could be farmed out to contractors so they carry the overheads. All the direct labour building and parks maintenance and vehicle driving for a start.
Think outside the box guys !!!
This readers letter is not terribly encouraging Ed on the subject of increasing property tax.
In a weighty tome, he or she has a pop at everyone and everything about the current state of Portugal (fair enough) but then in a one liner near the end, appears to give one concession to the state machine, which is actually in agreement with the socialists increasing IMI - because not everyone can afford to buy there own housing!
Brilliant.
Thanks for that ADN reader
http://www.algarvedailynews.com/features/readers-views/5560-portugal-the-real-state-of-the-nation-a-reader-writes
new Tax Plan will further effect the still very fragile market while Spain is in recovery mode.
That's socialists & socialism for you. The politics of envy.
They think we are the scum, as you put it, but actually they are.
Thank god they were shown the back door in the UK yesterday - another 5 whole years without their interventionist left wing agenda