The number of listings available for local lodging grew by 385% since the new law came into effect in November 2014, according to a report by AHP (the Hotel Association of Portugal). At that time, just 6,000 properties were registered for short-term stays. Today, that figure has multiplied to 29,000.
The assembly of a Lisbon condominium prohibited local lodging activity in its building. The fraction in question was intended for residential housing but was being used for commercial purposes. Numerous problems gave rise to complaints. Loss of privacy in common areas, excessive noise at night and poor use of the pool were some of the problems. The decision was upheld by the Lisbon Court of Appeals.
Starting in 2017, the Portuguese Tax Authority (“AT) is making available Automatic IRS Reporting to over one million taxpayers in Portugal. The change is part of “Simplex”, a programme designed to reduce bureaucracy at all levels of government.
Americans with financial accounts outside the United States should be careful to report it. Foreign financial accounts are high on the I.R.S. scrutiny list. Failure to disclose foreign accounts can be penalized severely. This includes people who inherited assets overseas as well as those who lived and worked abroad.
FinCEN Form 114, the Report of Foreign Bank and Financial Accounts is used for holdings of $10,000 or more and is filed electronically with the Treasury. Form 8938, which attachs to Form 1040, is used in more complex situations with $50,000 or more.
The Swedish Finance Minister, Magdalena Andersson, expressed dismay regarding the Non Habitual Residence regime that offers a 10-year tax holiday to newly arrived foreign pensioners in Portugal. “If they move to Portugal because they like fado or green wine or because they love the weather, then they should be able to do so. But if they move just to avoid paying taxes, then I think they should look in the mirror and think twice before making that decision” . . . “People must pay taxes either in Portugal or Sweden.”
This prompted Portuguese Minister of Finance, Mário Centeno, to promise to “take measures” to reframe tax benefits that are granted to foreign citizens residing in Portugal noting that the case of Swedish pensioners is not unique. Other countries have also voiced objections to the Portuguese “tax holiday”.
Currently, more than 2.3 million Portuguese live abroad or 22% of the population. After Malta, Portugal is the European country with most emigrants. In 2015, the latest year of available statistics, the main destination was the United Kingdom with 32,301 Portuguese entries, followed by France with 18,480, and Switzerland with 12,325. Moves to Germany numbered 9195 and Angola 6715.
Life expectancy continues to rise in developed countries and in some of them, to over 90 years old according to a study published in the journal of medical science “The Lancet “. The investigators estimated how many more years a 65-year-old would live in 2030 and found that women would reach an average of 24 more years (to 89) in 11 of 35 countries and men 20 years in 22 countries (to 87 years-of-age).
Automatic IRS Reporting kicks off this year and should reach one third of Portuguese families. Next year, this measure will be extended to a majority of national taxpayers. Piggy-backed to this automation will be quicker tax refunds which should be processed in as little as a fortnight. Despite new international information sharing (“Common Reporting Standard”), those with income from abroad will continue to declare as before.
There are more houses being sold today but high prices in central urban areas are pushing buyers out to the suburbs. Simultaneously, rentals are in decline. Letting accounted for 60% of real estate activity at the height of the crisis but has fallen sharply in the last two years. In 2016, lets accounted for just 25% of housing turnovers.
Those who live and work in Lisbon like tourists who visit the Portuguese capital. More than 90% of the population favours the presence of tourists. In addition, the contribution of tourism to the economic activity of the Lisbon Region is significant. In 2015 it amounted to 8.4 billion euros, corresponding to an average annual growth of 8% over the previous 10 years according to a survey by Intercampus and Deloitte Studies.