The tax authorities in Portugal have introduced a controversial increase in property tax on homes that offer a sea view, which will pay 20% more than the standard levy, while those facing north or overlooking a cemetery may be given a 10% reduction
The measure, which comes into effect this week, will only affect newly built properties as well as the property currently being reappraised.
New tax calculations will take into account how much sun a property gets, whether or not it is located on the ground floor, and the degree of noise pollution it suffers. Previously, the tax authorities were able to raise or lower the taxation on property by up to 5%.
The new rules are contained in the government’s decree-law no. 41/2016. When they were originally set out over the summer Fernando Rocha Andrade, Portugal’s secretary of state of tax affairs, said the objective was to ‘introduce greater fiscal equity’, by reflecting variations in current house prices, rather than to increase tax revenues.
However, the measure has attracted strong criticism, not least because many residential blocks built in Portugal within the last ten years face south to maximize exposure to the sun for energy saving reasons.
Luis Menezes Leitao, president of the Association of Lisbon Homeowners, said: ‘Now we are going to be penalized for doing what we thought was the right thing. These are people’s homes and many of them could now face not being able to pay these new taxes.’
Decree-law no. 41/2016 is here.
