New AIMI tax bracket to generate €31million

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The Stability Program for 2019-23 anticipates €31 million in additional tax revenues from the new maximum tax bracket for AIMI, applicable to Ratable Values (“VPT”) above €2 million. The Additional to Municipal Property Tax was first created in 2017 targeting luxury properties. Beyond the standard “IMI” assessment, Companies are charged AIMI at a rate of 0.4% on the sum of the Rateable Values of these properties. Residences held by entities in tax havens pay 7.5%. In the case of individual ownership, an AIMI rate of 0.7% is applied on “VPT” totals above €600,000 (or double this amount for married and cohabiting couples who opt for joint “IRS” declarations). When the “VPT” values exceed €1 million, the tax rate increases to 1%. The new bracket, created in the recent State Budget to be applied for the first time in 2019, foresees an AIMI tax rate of 1.5%, applicable to “VPT” amounts above €2 million.

Local Lodging: 11 registration cancellations per day

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In the past six months, almost 2,000 “AL” enrolments have been wound up. Many owners have stopped letting but failed to cancel their registrations due to capital gains tax liabilities. In the first quarter of 2019, new “AL” sign-ups fell nationally by 40% and by 60% in Lisbon. These numbers are likely to be understated. In total, the capital currently counts with 18,000 Local Lodging Establishments. Nationwide, there are approximately 83,000.  2020 could prove to be a year of mass exodus.

LATEST FAKE NEWS: Fuel Crisis:  Service stations converted to Local Lodging

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After the lack of petrol stemming from the striking lorry drivers, it’s now the lack of service stations! Like any space that remains idle for a few hours, service areas in major urban centres around Portugal have already been converted into Local Lodging Establishments to meet the growing demand of stranded motorists.

French “Great Debate” website attacks Portuguese “NHR”

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Opinions and proposals, shared on the “Great Debate” website (https://granddebat.fr/) – an initiative by French President Emmanuel Macron to respond to the protests of the “yellow vests” – refer to migrating French nationals who enjoy Portuguese Non-Habitual Residency (“NHR”) as “tax exiles” and to Portugal as “a fiscal eldorado” within Europe. Some participants contend that this double relief (tax exemption for pensions both at source in France and for 10 years in Portugal with “NHR” status) is intrinsically unjust, depriving both states of much-needed tax revenues and increasing the burden on paying taxpayers. The scheme is seen as promoting unfair tax competition among the Member States of the European Union.

Two more “AL” restricted neighbourhoods in Lisbon

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The Lisbon Municipal Council has prepared regulations which delimit the “’containment areas” to Local Lodging according to the law that came out last year. To the five neighborhoods that have been suspended since October 2018 from new holiday lets registrations – Bairro Alto, Madragoa, Castelo, Alfama and Mouraria – will be added two more:  Graça and Colina de Santana.

“ASAE” has just one inspector for every 10,000 AL’s

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There are more than 80,000 Local Lodging Establishments in Portugal and only eight inspectors from “ASAE” (Autoridade de Segurança Alimentar e Económica) to oversee them. Lack of safety and health conditions are the most common problems. But the capacity to intervene is “very limited”.

Portugal with €130 billion in EU subsidies since 1986

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Since joining the European Union, Portugal has benefitted from extensive economic support. According to the Bank of Portugal, Portugal has received a total of €130 billion since 1986 or ±2.5% of GDP per annum. Portugal ranks amongst the highest among countries with EU subsidy allocations. Nevertheless, the movement of money is reciprocal. Portugal also sends funds to Europe: customs duties, agricultural charges, VAT and others. Between 1996-2018, annual transfers have been relatively constant at ±1% of GDP.

VN de Gaia to cap “AL” offerings

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The Vila Nova de Gaia Municipal Council has passed regulations to limit Local Lodging establishments and prevent the dislocation of long-term residents from historic neighbourhoods. The city centre and the entrance to the bridge D. Luís I are two of the target areas for the new restrictions. These measures follow on the heels of similar actions taken in Lisbon and other municipalities around the country.

Minimum long-term rental contract to be one year        

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New legislation stipulates that the minimum period for long-term rental agreements is one year and renewable for three years. According to the decree, “SIMA” (“Serviço de Injunção em Matéria de Arrendamento” – Lease Injunction Service)  will be created to strengthen tenants’ rights, namely for the reimbursement of improvements incurred by tenants. The legislation also assures the continuation of the National Rental Office (BNA), which has exclusive jurisdiction to deal with procedures for evictions.

Tourism to increase by over 5% in 2019

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The World Travel & Tourism Council estimates that tourism in Portugal will expand by 5.3% in 2019, more than double the European average of 2.5%. Last year, the sector grew by 8.1%, contributing €38.4 billion to the Portuguese economy, a total of 19.1% of the country’s overall economic activity.