Government to Increase Property Transfer Tax for Non-Residents
The Portuguese government has announced its intention to increase the Property Transfer Tax (IMT) for non-resident individuals purchasing real estate in the country. The policy initiative, confirmed by Minister of Infrastructure and Housing Miguel Pinto Luz, is positioned as a measure to enhance fiscal equity and support the financing of the state's new housing programs. The government's objective is to generate additional revenue by targeting property acquisitions made by individuals who do not have fiscal residency in Portugal, particularly for second homes or vacation properties. This strategic decision is part of a broader fiscal plan aimed at ensuring the sustainability of public finances while addressing the ongoing housing affordability crisis. Minister Pinto Luz stated that the move is a “measure of justice” designed to rebalance the market, while assuring that Portugal will remain an attractive destination for international capital. The government has signaled the policy change, but the specific details of the tax rate increase are still being finalized and will be announced in the coming weeks as part of a comprehensive fiscal package presentation by the Prime Minister.
The implementation of this policy will require legislative approval from the Assembly of the Republic. The current minority government will need to secure support from other political parties to pass the measure. Minister Pinto Luz emphasized the government's commitment to dialogue with all parliamentary factions to advance its reform agenda. The proposed tax adjustment is specifically targeted and will not apply to foreign nationals who are fiscal residents in Portugal, nor will it affect Portuguese emigrants seeking to buy property in their home country. The focus is strictly on non-resident investors who benefit from the Portuguese property market without contributing to the national tax base through income or other declarations. This distinction is central to the government's argument that the policy promotes fairness and ensures that those who invest in the property market contribute more significantly to the country's fiscal health. The revenue generated from the higher IMT is expected to help fund various housing initiatives aimed at increasing the supply of affordable homes for the resident population.
This policy announcement arrives at a time of intense public and political debate surrounding Portugal's housing market. For years, property prices, especially in urban centers like Lisbon and Porto, have experienced rapid appreciation, making homeownership increasingly difficult for local residents. While multiple factors contribute to this trend, including supply constraints and tourism-related pressures, the role of foreign investment has been a recurring theme in political discourse. The government has been careful to state that it does not hold foreign investors solely responsible for the market's challenges. However, this targeted tax increase reflects a political calculation that a distinction must be made between resident and non-resident buyers. The minister has expressed confidence that the measure will not deter legitimate, long-term investment but will rather temper speculative acquisitions and create a more balanced market environment. The government's strategy is to navigate a fine line: capturing needed revenue without significantly undermining the country's appeal to international buyers who contribute to the economy.
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The formal legislative process will begin once the government submits its proposal to Parliament. The measure is part of a request for Legislative Authorization, which includes a preliminary draft of the new rules. The Assembly's decision to grant this authorization will be a critical step. Should Parliament approve the request, the government will proceed with finalizing the decree-law. The political dynamics within the Assembly will be crucial, as the government does not hold a majority and must negotiate on a case-by-case basis. The successful passage of this measure will depend on the government's ability to persuade other parties of its necessity and fairness. The opposition's response will be a key factor in the legislative outcome, and the debate is expected to touch upon broader themes of fiscal policy, housing rights, and the role of foreign capital in the national economy. The government maintains that its approach is transparent and necessary to solve one of the country's most pressing social and economic problems.
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