Housing protest

Portugal’s “Mais Habitação” package comes into force… tomorrow

Confusion still reigns over small print, particularly on Alojamento Local

Portugal’s hugely contentious legislative package on housing, driven by the Socialist government and unsupported by every other party in parliament, has been published in State gazette Diário da República today, and “so comes into force on Saturday”, writes Lusa.

It is a programme that has pilloried from start to finish, vetoed by the president, and which has essentially been shambling around for eight months, since it was first introduced.

Even after all this time, there is a confusion as to ‘what it all means’, particularly when it comes to Alojamento Local (short-term lettings), much of which faces an “extraordinary levy” of 20%, depending on a calculation that has not been clearly explained.

Some AL owners fear the extraordinary levy, whatever it is, will apply across the board. It won’t. It will apply only to apartments in ‘high density areas’.

Even so, ALEP – the association of AL owners – has been up in arms over the policy, saying it is much more ‘a war directed at apartments in Lisbon’ than any kind of attempt to increase the availability of housing for the general public.

Left-wing parties have failed in their demands for a ceiling on rents, lower mortgage instalments, a halt to evictions, an action against property and financial speculation and a ban on the sale of houses to non-residents – albeit the government has called a halt to giving tax breaks to non-residents – quite when we have not been told.

The most controversial and contested measures in the programme include the suspension of the registration of new AL properties outside low-density areas, the extraordinary AL levy, the forced rental by authorities of homes that have been vacant for more than two years (something critics have stressed will never actually happen), and the imposition of a ceiling on the value of new rental contracts for properties that are already on the market (again, according to reports, this has resulted in many landlords already removing their properties from the market. Have they returned to ‘the parallel market’? No one can tell).

Says Lusa, the package also includes an exemption from capital gains tax for owners who sell their homes to the State (again, this does not appear to be happening), an end to new ‘golden  visas’ for the purposes of buying real estate (golden visas being fast-track residence permits for large investors from non-European Union countries), an increase in the deduction per dependent for the Municipal Property Tax (IMI), changes to the separate rate of tax for income from property, and tax exemptions for owners who bring short-term rental properties back to the long-term market by the end of 2024.

The government’s measures have not just not delighted opposition parties: tens of thousands of everyday citizens have been demonstrating against them pretty much since they were announced, saying they do not go far enough. People are demanding a “house to live in” and a “planet to live on”, concludes Lusa (referring to the sudden spate of action by climate activists using red, sometimes green, paint to throw at politicians and the business premises of firms seen as ‘fossil fuel polluters’).

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