Portugal to scrap ‘unjust’ tax breaks for foreign
residents
Low-tax scheme launched during financial crisis has
stoked housing inflation that has drawn protests across country
Reuters in
Lisbon
Tue 3 Oct
2023 13.17 EDT
Tax breaks
for foreign residents in Portugal are “no longer justified”, the prime
minister, Antonio Costa, has declared, promising to close the scheme for new
applicants in 2024 after it stoked housing prices in one of western Europe’s
poorest nations.
Launched in
2009, the scheme allows people who become residents by spending more than 183
days a year in the country to benefit from a special 20% tax rate on
Portuguese-sourced income derived from “high value-added activities“”, such as
doctors and university teachers.
It was
introduced to attract investors and professionals as Portugal suffered from the
financial crisis.
Other
benefits of the scheme – known as Non-Habitual Resident – include tax
exemptions on almost all foreign income if taxed in the country of origin and a
10% flat tax rate on pensions from a foreign source.
Portuguese
citizens who lived abroad for five years or more could also apply.
Costa told
CNN Portugal late on Monday the scheme had “inflated the housing market”,
calling it a “fiscal injustice that is no longer justified”.
“It no
longer makes sense,” Costa added, explaining that those who already benefit
from it would continue to do so.
The
announcement came two days after thousands of people took to the streets of
Lisbon and other cities across Portugal to protest against soaring rents and
house prices stoked by growing gentrification and record tourism.
Government
data show more than 50% of workers earned less than €1,000 (£866) a month last
year, and a 65% increase in Lisbon rents since the start of the tourism boom in
2015 has made flats unaffordable for many.
House sale
prices have jumped 137% in that period, according to housing data specialists
Confidencial Imobiliário.
Critics say
measures announced by the government earlier this year that include curbs on
Airbnb short-term rentals and changes to the country’s golden visa scheme were
not enough to tame the crisis, which has also been exacerbated by a chronic
shortage of affordable housing.
.jpeg)
.jpeg)
.jpeg)
Sem comentários:
Enviar um comentário