Tabloid Correio da Manhã runs with the very positive headline today: “Fiscal shock wants to see 45,000 homes placed on rental market”.
But once one reaches the small print, it is not the kind of rental market many working people can afford.
“The government wants to agitate the rental market, and capture, among other properties, around 45,000 homes of the more than 300,000 that are out of this market, with rents of up to €2,300 per month”, explains the paper.
“This is the value of the concept “moderate rent”, created by the government, and which is subjacent to the programme “Construir Portugal”, which was presented yesterday”.
As the prime minister said in a press conference: “This is a policy of shock for housing. We want to shake the construction and rental market”.
The theory is that builders/ investors and landlords will be encouraged to put their money (the two former), or place properties for rent (the latter) because of new fiscal benefits introduced by the government.
Builders will see VAT reduced to 6% when they are building properties for sale with a price tag of up to €648,000; investors will be exempt from paying IMI (property rates) for eight years, plus other fiscal benefits, and landlords will see the tax they have to pay on (moderate) rents reduced from the current 25% to 10%.
At the same time, state property company ESTAMO, is looking into the 60,000 buildings on its inventory to see which of these could be ‘released to the rental market’, while tenants too will receive further leeway on rent payments in their annual IRS (income tax).
The only hesitation in any kind of collective jubilation over this news is that the ‘moderate’ market that the government has identified is surprising. It starts at €400 a month, admittedly, but goes all the way to €2,300 – a sum that is far out of the aspirations of most working people.
The PM did explain at the press conference that by setting the figure of €2,300 a month maximum rent, the government was thinking of working families trying to live in the city centres of Lisbon and Porto, or in the Algarve, where, he said, rents in that ballpark are commonplace.
“This is not a rent for rich people”, he said – quickly admitting that it is “still a fortune”.
The €2,300 a month was, he said, calculated on the basis of a 40% outlay of a couple with gross monthly earnings of €5,750.
As a policy, it has (naturally) piqued the interest of the construction sector (but not because this is slavering at the bit to build houses for rents close to €400 a month).
AICCOPN (the association of civil construction and public works industries) reacted quickly, saying: “The success of these initiatives will depend on their prompt execution, the clarity of applicable criteria and articulation with complementary measures”.
According to CM, CHEGA too is ‘receptive’ to the new ideas (which is all the government will need to get them through parliament).
More left-leaning parties however, are not impressed. “Speaking to PÚBLICO, Marina Gonçalves, former socialist housing minister, argues that the values the government sets as ‘moderate prices’ – rents up to €2,300 and sale prices up to €648,000 – are ‘completely out of touch with reality’. Emphasising the PS’s willingness to negotiate, the former minister points out that, with these figures, reaching an agreement will be difficult”, writes Público today.
“The PCP says it is ‘appalled’, the Left Bloc considers the government’s option “incomprehensible”, LIVRE criticises the ‘drip-feed policy’ and PAN considers the measures insufficient”, the paper continues.
“Liberal Initiative (IL) and JPP see positive signs in some of the initiatives but want to wait for the final proposals”.
Yesterday’s announcements are just the first of the government’s overall plan for dynamising the housing market, promises the executive. In December, there will be policies outlined for “evictions, problematic inheritances, condominiums, rental support programmes, flexibility of credit” and others.
Source: Correio da Manhã/ Público
