O access to housing is a fundamental right, but residential real estate is where the largest share of taxes is incurred., start by revealing the idealist. And it’s a tax burden about the sector that has prevented more private investment in affordable housing and housing for the middle class, according to industry professionals.
“If building homes for the middle class is difficult, making affordable housing is nearly impossible”, says Miguel Cabrita Matias, from the Swiss real estate investment company Mexto.
During the SIL Pro Conference, promoted by the Portuguese Association of Real Estate Developers and Investors (APPII), several experts were present who debated about ‘What to change in the future to attract investors?‘. And on one thing they are all in agreement, the tax burden it acts as a ‘brake’ when investing in residential segments that are in high demand, such as affordable housing, according to Portugal’s real estate marketplace.
This is because “what we pay in taxes is brutality”, says Miguel Cabrita Matias. For José Cardoso Botelho, CEO of Vanguard Properties, “40% of the cost of a house is tax. ” That’s why, “It is not possible to build affordable housing” in Portugal, given that “The construction cost is higher than the sale”.
Isn’t the solution in fiscal balance?
“We have to do studies and find a balance in taxation ”to find a” reasonable level ”of taxes on residential, defends Gilberto Jordan, CEO of Planbelas (Andre Jordan Group). And the first step has already been taken, reveal the idealist.
According to Reis Campos, president of the Portuguese Confederation of Construction and Real Estate (CPCI), the first meeting that brought together the central state with sector associations and confederations, in the context of the presentation of proposals for the 2022 State Budget (OE2022), there were 20 measures to relaunch the real estate and construction sector in the next year:
- Promotion of private investment through specific credit lines;
- Application of a 6% VAT rate in general and not just urban rehabilitation;
- Incentives for affordable housing;
- Greater speed of administrative procedures to move projects forward;
- Eliminate the AIMI, as it is a “doubling of the tax that potentially falls on all types of houses”;
- Ensure through, eliminating geographic restrictions on gold visas.
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