Image of Mariana Mortágua - António Cotrim/ Lusa
Image of Mariana Mortágua - António Cotrim/ Lusa

Left Bloc turns up heat over non-habitual resident tax regime

Calls for ‘immediate end’ to NHR as well as ban on sale of houses to non-habitual residents

Left wing ‘radicals’ Bloco de Esquerda have seized on the announcement that Portugal’s Socialist government is scrapping the NHR (non-habitual resident) regime that has seen hundreds of thousands of foreign retirees chose Portugal as a way of reducing their tax burden by calling for an immediate end to the scheme, as well as a ban on the sale of properties to non-habitual residents.

These initiatives were presented by the party’s coordinator Mariana Mortágua at a press conference yesterday in which she accused prime minister António Costa, of having presented the government’s “capitulation” in the face of the country’s crippling housing crisis.

The Left Bloc’s proposals – very much a copy-paste of an initiative already enforced in Canada – will be debated on October 25 as part of BE’s potential agenda, and voted on the same day (in other words, before the debate on the 2024 State budget).

Speaking to journalists, Mariana Mortágua warned of the consequences of the PM’s announcement that NHR was coming to an end at some point next year. 

“If nothing is done and if a moratorium is not put in place now to prevent access to the tax regime for non-habitual residents, then – as the prime minister did on Monday – we will be promoting a tax-break for registrations for the non-habitual resident regime in the space between the announcement and the end of the regime. That’s what happened with gold visas, and that’s what happened with the measure limiting the increase in rents for new contracts,” she said.

“The government’s mere announcement (…) becomes a promotion and an appeal by the prime minister for those who want to take advantage of this regime, to which they will effectively have access for ten years”.

It was a sort of ‘appeal’ to foreigners to act “quickly before the regime is eliminated”.

And Mortágua, whose party has been gunning for the scrapping of NHR since 2013, also argued that there should be a “ban the sale of houses to non-residents.

“We need to prevent a rush to buy houses by non-residents in order to avoid further worsening the price of housing,” she said – stressing that in his interview with TVI and CNN/Portugal earlier this week, Mr Costa didn’t clarify what the increase in rents would be in 2024, which creates further uncertainty.

In terms of rents, the Left Bloc is proposing to limit the increase to 0.43% – “the same as before the inflation surge”.

“We’re also going to present measures so that there are ceilings on rents and so that everyone knows that their rent won’t reach speculative values. There need to be ceilings according to the type and location of the house, with a maximum limit,” said the party leader.

Bloco de Esquerda will also be proposing a reduction on mortgage payments: “A proposal that is made by the banks based on a maximum effort rate that people can bear and that is supported by the bank’s profits,” she said.

Source material: LUSA