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Outrage as government proposes new rates tax to hammer properties over €500,000

Even before it has been properly outlined, finance minister Mário Centeno’s plan to introduce a new rates tax on properties over €500,000 is causing uproar.

Construction bosses, real estate associations, Opposition MPs – you name it, they all consider the idea will send investors scuttling.

Worse, fears are that the move will end up hammering a lot more than the rich.

Reis Campos, president of the confederation of Portuguese construction and real estate (CPCI) explained that although the number of properties valued at over €500,000 is “not very high”, property owners will want to recover costs “indirectly”.

This means for people either renting or buying, the cost of property will “inevitably increase”.

Calling the plan “disastrous”, he was backed by Luis Lima, president of APEMIP, the association of real estate professionals, who added that, in his opinion, the tax was a “concerted attack on the middle classes, even though it looks like an attack on the rich”.

In fact, the “only people who won’t be affected are precisely the rich”, suggested Lima, as this sector “has the capacity to distribute property” in a way to ensure it would “never be affected”.

The truth, however, is that very little yet has been explained.

The news simply emerged from last Thursday’s Council of Ministers in which finance chief Centeno pledged “no increase in IVA” in next year’s State Budget, but a rise in what he called “indirect taxes”.

No numbers have been given – though Jornal de Notícias is suggesting this morning that it would be a “progressive tax” designed to swell State coffers by as much as €200 million a year.

PSD parliamentary leader Luís Amado reacted to the news, saying: “Last year we were told austerity would be reducing and that the economy would grow.”

Instead, the economy is growing less than projected and “to balance public accounts, the government has had to impose new taxes”.

It is a situation in which “no Portuguese can be relaxed”, he warned.

natasha.donn@algarveresident.com