APPII Chief Warns Government: IMT Hike for Non-Residents is "Bad News for the Country"
The head of the Portuguese Association of Real Estate Developers and Investors (APPII) has voiced strong opposition to a proposed increase in the Property Transfer Tax (IMT) for non-resident buyers, labeling the measure as "bad news for the country." In a statement, new APPII CEO Manuel Maria Gonçalves urged the government to reverse the planned tax hike, which is included in the draft of the State Budget for 2026. He warned that such a move creates legislative instability and discourages foreign investment, stating, "Once again, they changed the rules in the middle of the game."
This criticism came alongside praise for a separate government initiative to reduce the VAT (IVA) on new housing construction from 23% to 6% for properties valued up to €648,000. Gonçalves acknowledged that this VAT reduction is a positive and long-awaited step that could help stimulate the supply of more affordable homes. However, he stressed that the benefits of the VAT cut could be undermined by the simultaneous penalty on foreign buyers. The APPII is calling for greater legislative stability to build confidence in the market. This is a critical topic within the broader discussion of regulatory and legal frameworks in Portugal.
The proposed IMT increase for non-residents is a significant concern for the real estate sector, which relies heavily on foreign capital for new developments, particularly in high-value areas like Lisbon, Cascais, and the Algarve. An increase in transaction costs for this key demographic could cool demand and have a chilling effect on the market. Professionals such as English-speaking real estate lawyers are closely monitoring the proposal as it would directly impact their international clientele.
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Gonçalves stated that the details of how the VAT reduction will be implemented are still unclear, but he called for a broad consensus in Parliament to create a stable environment for the real estate sector to thrive. The APPII's position reflects a desire for coherent, long-term policies rather than contradictory short-term measures. The association argues that while encouraging moderately priced housing is important, penalizing international investors is counterproductive to the overall health of the property market.
The debate over the State Budget for 2026 will be a focal point for the industry in the coming weeks. The final decision on the IMT for non-residents will be a key indicator of the government's long-term strategy for foreign investment in Portuguese real estate. For investors, understanding these potential financial concerns is paramount before making a commitment.
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