Real Estate Is the Order of the Day in the Discussion About State Budget Proposal

Fri 16 Nov 2018

Real estate is the order of the day in the discussion about State Budget proposal for 2019 (OE2019). The BE (Left Block) wants the revocation of the Golden Visa Programme and the creation of a new regime for taxation of real estate surplus. The PSD (Social Democratic Party) wants the taxation to be applied based on the duration of property ownership. The PSD puts a brake on the ascent of AIMI and the descent of IMI.


"What we propose, is not only the mechanism to stop [real estate] speculation, but also a more fair and rational mechanism for taxing capital gains," announced Mariana Mortágua at a press conference in Parliament.


According to Lusa, in addition to the new regime of capital gains taxation, the package of changes that the BE presents on housing includes: the elimination of sources of pressure on the real estate market; measures for the public housing stock and public investment in housing: amendments to the Municipal Property Tax (IMI), and protection of housing on a supported income regime.


Regarding the alleviation of pressure on the real estate market, the BE presents two proposals for revocation: one considers Non-Habitual-Residency and another the Golden Visa Programme. "This new regime of taxation of capital gains has clear advantages", it aggravates the taxation on the intermediary and short-term speculative movements, and "benefits the investment in urban rehabilitation", since it acts as a relief from the tax due, explained Mariana Mortágua. "It is a regime that is countercyclical," he said, explaining that it only aggravates the tax burden on gains derived from circumstantial market valuation.


The deputy said, however, that no tax regime can "stop real estate speculation alone". "But a state has a duty to create a tax system that, when there is a market overheating, it will manage to increase revenue in proportion to this overheating, gaining resources to invest in public housing and to protect people,".


You can read the original article in Portuguese here.

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