Nearly 5,900 families have lost their homes since 2014 due action by Portugal’s tax authority.
Parliament at last is to debate proposals put forward by the Socialist Party and the Left Bloc to stop future seizures of first homes to reduce unnecessary homelessness and family breakdowns.
Property is the main asset seized and sold off by the tax authorities, often for a low percentage of its market value in a auction system that lacks transparency, competition and any evidence of good sense.
Parliament is to debate and vote on two bills this week, one from the Socialists and one from the Left Bloc both of which aim to curb situations where people lose their homes for debts to the taxman and social security.
The two proposals are separate but come to the same thing, a plan to prevent the eviction of families because of tax debts.
The Socialist proposal is for an outright ban on property seizures and sales to settle tax debts, unless the debtor has a high value home with a patrimonial value (valor patrimonial) of over €574,323. This will prevent high net worth individuals intentionally converting assets into a single high value residence.
The new Socialist proposal to be presented to parliament goes further than the current rule that prevents sale of the property if the tax debt is of a lesser amount, and will make it illegal to proceed with the sale of a home whatever the tax debt amount.
The Left Bloc points out that since 2014, "5,891 families have lost their homes due to tax department debts. Added to this is the number of families who have lost their homes to the bank because they could not pay the bank loan."
The Tax Procedure Code should look first at bank accounts, bank deposits, then assets such as cars and finally, real estate.
In reality it has been people’s homes that the tax department has seized and sold as it is easier.
Both proposals provide that the new rules apply to processes that are outstanding at the time any new law comes into force.
One of the insidious aspects of the Tax Authority’s behaviour is the bonus paid to managers and staff who profit from these so called ‘coercive collections.’
If the tax office staff agreed to more debts being paid over time, they would see a reduction in their own incomes as bonuses would be reduced.
