Real Estate Sector Calls for Repeal of IMT Surcharge for Non-Residents
Leaders in Portugal's real estate industry have voiced strong opposition to the government's proposed increase of the Municipal Tax on Onerous Property Transfers (IMT) for non-resident buyers, warning that the measure could undermine foreign investment and damage the country's international standing. They are calling on the government to withdraw the proposal entirely.
Hugo Santos Ferreira, president of the Portuguese Association of Real Estate Developers and Investors (APPII), issued a direct appeal to eliminate the measure. Speaking to Jornal Económico, he stated, "My suggestion as president of real estate developers and investors is to eliminate this measure, because it will have a negative impact on the country's credibility at an international level. I am somewhat afraid that this message will be understood as foreigners not being welcome in Portugal."
Ferreira characterized the decision as contradictory to the government's own economic strategy, stating, "It seems to me a measure that goes a bit against what the Government itself understands. Portugal needs foreign investment like it needs bread, to boost the economy, create jobs, and also create opportunities in housing." He expressed concern that the policy would cause international investors to suspend or cancel their plans in Portugal, as the increased acquisition cost would act as a significant deterrent.
The APPII president also questioned the logic of the measure as a solution to the housing crisis, arguing that foreign buyers operate in a different market segment from local purchasers. "They are not typically the houses that the Portuguese buy. We are talking about houses with a much higher value," he explained. "We have all come to the conclusion that punishing demand does not solve the problem of housing supply." He identified investors from the United States, Brazil, and France as being among the nationalities most likely to be impacted.
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Patrícia Barão, partner and head of residential at the real estate consultancy Dils, shared this critical view, calling the proposed tax hike "a very bad sign." She argued that the government's focus should be on creating more housing supply rather than penalizing buyers. Barão referenced recent data from the National Statistics Institute (INE), which showed that foreign buyers accounted for only 5% of recent transactions. "The numbers show that it is Portuguese families who are buying houses. This measure makes no sense," she asserted.
Barão warned of the risk of capital flight, stating, "The danger is exactly that we send the message that foreign investment is not welcome in Portugal, which is the wrong message." While acknowledging that other government housing initiatives have been viewed positively by the market, she stressed the continued importance of foreign capital. She also downplayed the role of international buyers in inflating prices for the general populace. "Foreigners buy houses that are double or triple the price of what Portuguese families buy. It's a market that is looking for a different type of property," she concluded.
The collective response from the real estate sector indicates significant concern that the proposed IMT adjustment is a counterproductive policy that could have far-reaching negative consequences for the Portuguese economy and its attractiveness to international investors.
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