Real Estate Leader Calls for Re-evaluation of Proposed IMT Hike for Foreigners
A key housing policy proposal by the Portuguese government to increase the IMT (property transfer tax) for non-residents has drawn criticism from real estate industry leader Patrícia Barão, a partner at Dils Portugal. In a public statement, she warned that the measure, part of a new national housing plan, could send a damaging message to the international investment community and should be reconsidered. The policy's objective is to address the housing crisis, but its implementation strategy is now under debate.
The government's stated policy objectives are to increase the supply of affordable housing for Portuguese residents. The broader plan includes positive measures such as a VAT reduction from 23% to 6% for construction aimed at the affordable market. However, the targeted tax increase for non-resident buyers is seen by some experts as a potentially counterproductive move. Barão argues that it risks alienating foreign capital, which is vital for economic growth. This is a critical topic covered in our investment and strategy guides.
The implementation strategy for the tax hike has not been fully detailed, but the announcement alone has caused concern. Barão pointed out that foreign buyers, while representing only 5% of residential transactions, operate at a much higher price point (average of €750,000), and their investment is crucial. She also highlighted that the commercial real estate market is almost entirely driven by foreign capital, with €1.2 billion invested this year. A negative signal in the residential sector could have wider repercussions.
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The affected population groups would be non-resident foreign nationals, excluding Portuguese emigrants. This targets a demographic that has been actively investing in areas like Lisbon, Cascais, and the Algarve. The budget allocation for the broader housing plan is significant, but the revenue gained from this specific tax hike may not outweigh the potential loss of overall investment. Stakeholder consultation with the real estate industry appears to be ongoing, with figures like Barão voicing strong opinions. For those affected, seeking advice from international property law experts is advisable.
The expected economic and social impact is contested. While the government hopes to cool the market for locals, critics fear it will deter investment needed for new construction and urban regeneration. There is political support for the measure from parties focused on the domestic housing crisis, but also opposition from those who value foreign investment. The debate highlights the delicate balance between national housing needs and international economic policy. Future policy developments will be closely watched by the market.
Barão concluded that while most of the government's housing measures are positive, the IMT proposal is a measure that "must be re-evaluated." She stressed the importance of looking at foreigners more carefully and not launching measures without first assessing their potential impact on the sector's dynamics. Understand policy impacts on your Portugal property plans at realestate-lisbon.com.