As from Tuesday May 24th, those in Portugal owning money to the taxman can no longer have their homes seized by the State and auctioned off.
The new law passed as part of the Socialist/Left Bloc agenda, finally has been signed off by the president and is published in the Official Gazette.
The joint proposal from the socialists, the left Bloc and the communists allows the State to take a charge over a property but the Tax Authority is no longer allowed to sell it to recoup monies owed.
The Tax Authority now must follow similar rules to the Social Security department which also is prevented from triggering evictions for often small debts.
Anyone in a permanent residence that is valued at up to €574,323 comes under the new rules. Property will be controlled by the State for as long as it takes the debtor to pay off the amount owed.
Anyone with a house worth more than the break point figure, not many, has a year in which to settle their debt or have the property auctioned off if they fail to do so.
The president wanted this measure for debtor’s relief also to cover money owed to banks and companies. Marcelo Rebelo de Sousa said he would approve the law but wanted it extended. This has not happened.
Due to the banks’ influence on the Portuguese ecomony and politics, the new law does not inhibit their right to seize homes and sell them off, often for small amounts.
