2023-10-05 06:34:41
The Portuguese government announced Monday evening that the country will stop granting tax exemption to foreign retirees from January 2024. This policy introduced in 2009 is accused of worsening the housing crisis.
Between 2009 and 2020, foreign retirees who came to settle in Portugal paid no income tax. This policy, implemented in the wake of the European debt crisis, aimed to attract foreign capital. The law evolved in 2020 with the introduction of a tax rate of 10%, which remains largely advantageous in a country where taxes are among the highest in Europe.
>> Read regarding it: Portugal ends tax exemptions for foreign retirees
In recent years, this policy has attracted thousands of foreign retirees to Portugal, which has had the effect, among other things, of reviving the real estate market, particularly in the Lisbon region or in the seaside resorts of the Algarve ( south). So much so that, from now on, these tax incentives are accused by the government of favoring the explosion of real estate prices in Portugal.
Housing crisis
From 2024, new arrivals in the country will no longer be entitled to any privileges. Tax advantages for foreigners active in professions considered to have “high added value”, such as doctors or architects, will also be eliminated.
For the government, these measures are no longer justified. “Maintaining such a measure in the future would amount to prolonging a fiscal injustice,” Socialist Prime Minister António Costa explained on television on Monday.
Between 2012 and 2021, the cost of housing increased by 78% in Portugal, compared to 35% in the European Union as a whole, according to a study by the Portuguese Francisco Manuel dos Santos Foundation. In the second quarter of 2023, the median rent jumped another 11%, according to official data.
Faced with growing anger among the population, in the midst of a housing crisis, the government has taken this drastic decision. It now remains to be seen whether it will have direct consequences on the economy.
Olivier Bonamici/jop with ats
1696492130
#Portugal #longer #grant #tax #exemption #foreign #retirees #rts.ch
