After announcements last year of policies to fix the housing crisis, the government has admitted it needs help. “There is no silver bullet”, housing secretary Patrícia Gonçalves Costa admitted in Lisbon at the presentation of an OECD report: housing is “a complex problem that requires integrated management”; not one that central government can solve on its own.
“We need to work hand-in-hand on the social, construction and budget aspects (…) It is not the central government that solves (this crisis) alone, nor the autonomous regions, or municipalities; it requires continuous dialogue,” she said, deferring also to ideas that may come from the European Commission (focused on a European housing plan for just the same ‘urgent reasons’.)
“Housing in Portugal today is one of the biggest sources of social concern and a real threat to societal cohesion,” the secretary of state added – pointing out that the diagnosis “is based on a demand that has grown rapidly, driven also by the attractiveness of cities and immigration” – the effects of which had not been anticipated.
Given the scenario, the OECD’s recommendations are aimed at “unlocking the public supply and getting the housing engine running again,” she said – highlighting a new strategy in which the government is preparing changes to the general regulations for urban buildings, particularly with a view to simplification and flexibility.
The executive is also reviewing the urban rental regime, which “will be finalised shortly,” and is also working on strengthening public (housing) supply with a public-private partnership programme.
Regarding IMI (Municipal Property Tax/ rates), the Secretary of State pointed out that there is already “legislation that allows municipalities to increase IMI if properties are vacant,” adding that the package of tax incentives that the government has proposed and will present on Friday in parliament includes IMI exemption for affordable rental contracts.
In its ‘Economic Survey’ of Portugal, where it analyses the country’s economic performance, the OECD dedicates a chapter to the challenges of the housing crisis, proposing solutions such as “simplifying building permits,” “reforming taxation,” and “rebalancing rental regulations.”
The OECD study recommends increasing IMI (Municipal Property Tax), limiting the taxation of capital gains from the sale of homes, and raising taxes on “underused” or vacant homes in “high-demand areas.“
Source: LUSA
