Excellent news for people buying property – but not such good news for local councils – is the announcement last Friday that Portugal’s IMT property transfer tax is to be done away with in a phased operation concluding in 2018.
According to the new law, published in Diário da República last Friday, IMT dues will be reduced by a third in 2017 and two thirds in 2018, when the tax will cease to exist altogether.
In their place will come a form of Stamp Duty to which Finance Minister Maria Luís Albuquerque has said will carry “half the fiscal charge” and “represents a loss of €460 million in receipts”.
But the association of national councils (ANMP) claims Albuquerque is being far too simplistic in her explanations – neglecting to explain that while the elimination of IMT penalises local councils (which used to benefit from the tax) it creates a whole new money conduit for the government, as the Stamp Duty will go straight into State coffers.
Following a study commissioned by the association which highlights the extent to which borough councils are set to lose, ANMP has said it “disagrees wholeheartedly with the elimination of IMT as a municipal receipt without adequate compensations being assured”.
Says Jornal de Notícias: “For ANMP, the government seeks to substitute the current IMT – a form of council income – for Stamp Duty, which is a governmental income … which represents a transfer of council income (reducing it) to central administration (increasing)”.
It is a fight set to rage after the elections and one that will almost certainly play into the camp of the PS Socialists as the campaign remains neck-and-neck less than a month away from Polling Day.
