Categories: Taxation

rich real estate assets taxed to finance pensions

What to be afraid of when France's public debt is not the brightest and that the IMF recently expressed concern about the record level of global debt ... Portugal is set to introduce a tax on wealthy property owners in the coming months to help finance its pension scheme&period;&NewLine;It's perhaps only a short step from there for the French government to attempt to apply these types of measures in France&comma; only a presidential election might prevent our rulers from taking this step&comma; at first&period;&NewLine;According to the draft budget submitted by Portugal's Socialist government to Parliament on Friday evening&comma; Portugal will levy a tax from 2017 on the real estate assets of wealthy taxpayers&comma; with a tax value exceeding 600,000 euros&period;&NewLine;Earlier in the day, Socialist Prime Minister Antonio Costa announced that the tax would be used to finance Portugal's pension system&period; "The taxation of large real estate fortunes will be used to strengthen the sustainability of our Social Security system and to improve the quality of life of our citizens. contribute to tax justice"he declared to MPs&period;&NewLine;According to the draft budget&comma; if the taxable value of an owner's total real estate assets exceeds 600,000 euros&comma; a rate of 0&comma;3&percnt; will be levied on the portion above this threshold&period; The projected revenue from this tax&comma; estimated at 160 million euros per year&comma; "will make it possible toincrease pensions "For her part, Catarina Martins&comma; leader of the Left Bloc&comma; one of the government's allies&period;&NewLine;This draft budget aims above all to reassure Brussels and the markets of Portugal's determination to curb deficits&comma; while at the same time appeasing its anti-austerity left-wing allies&period; "It's a responsible budget&comma; marked by a consolidation of accounts which is combined with social orientations"&comma; summarized Finance Minister Mario Centeno&comma; adding that he expected a "positive assessment" from the European Commission.<a href="http&colon;//www&period;leblogfinance&period;com/2016/07/espagne-et-portugal-declares-en-derapage-budgetaire&period;html">a </a>European Commission&period; Let's not forget that last July&comma; Portugal certainly won Euro 2016 ...&period; but was declared a budget slippage by the latter&period; &NewLine;But, as expected, this project, which has been under discussion since September, has provoked anger in the real estate sector. Luis Lima, President of the Portuguese Association of Real Estate Agents, believes that "this tax will have devastating effects on the sector and will undermine the confidence of foreign investors";&NewLine;Nowadays, these are pouring in in Portugal to buy houses and apartments&period; Among the top foreign buyers were <a href="https&colon;//vivreauportugalconsulting&period;com/demande-de-rnh-portugal/">French</a> &lpar;27&percnt;&rpar;&comma; including many retirees attracted by tax exemptions&comma; followed by the British &lpar;18&percnt;&rpar; and the Chinese &lpar;13&percnt;&rpar;&period; Since 2013&comma; Portugal has in fact introduced an almost total income tax exemption for a ten-year period for expatriates settling in the country&period; The tax advantage introduced in 2013 is based on "non-habitual resident status"&comma; which implies not having been resident in Portugal for tax purposes for the last five years&comma; with no age or nationality requirements&period; This attracts both retirees&comma; with high purchasing power&comma; and professionals from high value-added sectors&period;&NewLine;In 2015&comma; the top three countries in terms of new residents were Great Britain &lpar;23&percnt;&rpar;&comma; China &lpar;18&percnt;&rpar; and France &lpar;16&percnt;&rpar;&period; In the first half of 2016&comma; the French came out on top&comma; accounting for 25&comma;5&percnt; of newcomers&comma; according to forecasts by l'Apemip&period;&NewLine;"This is an unprecedented tax attack on the real estate sector", at a time when "the market was booming&comma; attracting ever more foreign investment"&comma; said the Lisbon Property Owners Association &lpar;ALP&rpar;&period; It should be noted that currently &comma; around a quarter of Portuguese real estate buyers are foreign&period;&NewLine;However, the 600,000 euro threshold will spare most beneficiaries of "gold" visas&comma; residence permits granted to non-European investors entering the Schengen area&period;&NewLine;In order to attract investment&comma; since the end of 2012, Portugal has been granting these visas to applicants willing to fork out at least 500,000 euros for a property purchase&comma; invest at least one million euros or create ten jobs&period; In the space of 4 years&comma; 3888 such visas have been granted&comma; corresponding to an investment of 2&comma;37 billion euros&period; Among them&comma; mostly Chinese&comma; but also Brazilians and Russians&period;&NewLine;Doubly attacking the real estate sector&comma; the Portuguese government has also decided to increase the level of taxation on tourist rentals&comma; which previously benefited from lower rates than long-term rentals&period; This measure comes as the number of tourists accommodated in Lisbon via Airbnb&comma; platform for renting accommodation between private individuals&comma; doubled in 2015&comma; from 213,000 to 433,000 people in a single year&period;&NewLine;Sources &colon; AFP&comma; La Tribune&comma; Apemip&NewLine;

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