5 ms·

First, Joaquim Miranda Sarmento is not the Portuguese Prime Minister, but the Minister of Finance. Second, the tax breaks were removed at the end of last year

by devuo 2y ago

First, Joaquim Miranda Sarmento is not the Portuguese Prime Minister, but the Minister of Finance. Second, the tax breaks were removed at the end of last year because of a widespread feeling in the general populace that these were deeply unfair policies that were understood at the root cause of gentrification and unreasonable real estate valuations. The median house price in Lisbon and Porto metro areas, are now above what the p95 Portuguese salary can pay. So yes, speculation and wealthy foreigners are an issue, as it's not Portuguese salaries propping these values. Third, the party in power does not have a majority in parliament. This means they'll need support from other parties to approve this deeply divise tax break. While I'm sure they'll get the support from the Liberal party, I'm seriously doubtful they'll get it from the other parties. It's also quite likely that we'll have new elections in the next 12 months and the party in power, despite many populistic policies in the last 4 months since they won by a few thousand votes the election, has not yet been able to gain a wider trust from the voters since then. I doubt this tax break will see the light of day anytime soon. Fourth and finally, there has been zero talks about this in Portuguese media. I feel this is more of a politician talking out of his ass without double/triple checking with the prime minister.

voisin 2y ago
> The median house price in Lisbon and Porto metro areas, are now above what the p95 Portuguese salary can pay. So yes, speculation and wealthy foreigners are an issue, as it's not Portuguese salaries propping these values. The second sentence doesn’t necessarily flow from the first. The same is true in major cities in Canada, New Zealand, England, etc etc, and this has little to do with foreign visitors and much to do with interest rates and availability and quantum of credit.
- lazide 2y ago
  Uh, all of the locales you mention have been targets of huge foreign investment and ‘rich person’ immigration in the last decade.
  - voisin 2y ago
    Canada first massively disincentivized foreign investment and the. limited it altogether because, like Portugal, foreigners were the scapegoats for wildly increasing housing prices. Turned out they had almost nothing to do with it and it was all poor government monetary and lending policy. Governments will do everything they can to deflect blame. I don’t have direct experience but I have a good friend from New Zealand who says the situation there closely mimicked what he has seen in Canada. Easy to blame foreign money, hard to look in the mirror. Also, as a side note: “rich person” immigration is absolutely unequivocally not the reason for house prices skyrocketing in places like Moncton, New Brunswick or Campbell River, BC. No one from Monaco or Hong Kong is clamouring to buy houses at 5x historical average valuations compared to income. I suspect in 5 years it will become obvious that in Portugal the situation had to do with monetary policy and not foreigners as well. Time will tell.
    - tharmas 2y ago
      Mostly false. Theyve been trying to attract foreign ”investors" for quite some time. Expo 86, 2010 Winter Olympics. What the clowns didnt realise was all the ”investment” would just go into housing. Nothing else
      - voisin 2y ago
        Every country tries to attract foreign investment. It’s a major component of GDP. And the difference between Canada ca. 1986 and 2010 versus 2018-2024 is… monetary policy! (Though admittedly 2010 looks pretty similar to 2018, house prices were already starting their insane run up). It’s monetary policy. Housing prices are the fault of governments of various levels (constrained supply at the municipal levels, easy credit at the national levels). It isn’t foreigners, at least not in Canada, NZ, England, etc. and I’d bet money it isn’t in Portugal either.
        lazide 2y ago
        Sure, but that isn’t the assertion I was replying to! My personal opinion is the wealthy gravitating to a spot are as much about it being a useful ‘nutrient gradient’ on the monetary policy front, after the primary places are exhausted (like the big US cities) or because those places were less accessible now. But the original assertion I was replying to was that those places never had the rich foreign investor thing happen - when they absolutely did!
EVa5I7bHFq9mnYK 2y ago
Wealthy foreigners bring money from the outside into Portugal, so they are net positive. And not only money, but also knowledge, culture and diversity. Local restaurants are happy, local landlords are very happy, who is not happy is local renters. Maybe the tax should be imposed on the landlords' windfall profits instead?
- leononame 2y ago
  They might or might not be a net positive. I think it's more complicate. It's not just money, but also where the money is going and what it is achieving. E.g. a lot of wealthy foreigners will increase the rent, prices for restaurants and services. Oftentimes, the quality of restaurants/services might go down (because if you cater to a crowd that only stays a couple of months, there's not the same need to get these people to come back. That are changes that are often received negatively by the locals. Foreigners also make use of public services like streets, public transport etc., often without paying income tax.
- kranke155 2y ago
  I cant help but laugh at the simplification. Net positive for whom? Landlord and restaurants are happy vs the rest of the population (99%). Its a monstruous policy, considering wealthy nomads pay way less tax than locals.
  - deleted 2y ago
    [deleted]
  - EVa5I7bHFq9mnYK 2y ago
    Sure about 99%? Tourism is 20% of Portuguese GDP. There are 66,000 real estate companies in Portugal. So many more than 1% benefit from wealthy foreigners. The reason there are many poor people has nothing to with techbros with laptops. Better fix your bloated and corrupt public sector.
    - JetSpiegel 2y ago
      The "corrupt public sector" has been focus of complaints at least since the 19th century, across three regimes, but the number of children living on their parents' homes increased after the foreigners with laptops bought the damn houses, either directly, or through real estate funds.

by devuo 2y ago

voisin 2y ago

> The median house price in Lisbon and Porto metro areas, are now above what the p95 Portuguese salary can pay. So yes, speculation and wealthy foreigners are an issue, as it's not Portuguese salaries propping these values. The second sentence doesn’t necessarily flow from the first. The same is true in major cities in Canada, New Zealand, England, etc etc, and this has little to do with foreign visitors and much to do with interest rates and availability and quantum of credit.

lazide 2y ago
Uh, all of the locales you mention have been targets of huge foreign investment and ‘rich person’ immigration in the last decade.
- voisin 2y ago
  Canada first massively disincentivized foreign investment and the. limited it altogether because, like Portugal, foreigners were the scapegoats for wildly increasing housing prices. Turned out they had almost nothing to do with it and it was all poor government monetary and lending policy. Governments will do everything they can to deflect blame. I don’t have direct experience but I have a good friend from New Zealand who says the situation there closely mimicked what he has seen in Canada. Easy to blame foreign money, hard to look in the mirror. Also, as a side note: “rich person” immigration is absolutely unequivocally not the reason for house prices skyrocketing in places like Moncton, New Brunswick or Campbell River, BC. No one from Monaco or Hong Kong is clamouring to buy houses at 5x historical average valuations compared to income. I suspect in 5 years it will become obvious that in Portugal the situation had to do with monetary policy and not foreigners as well. Time will tell.
  - tharmas 2y ago
    Mostly false. Theyve been trying to attract foreign ”investors" for quite some time. Expo 86, 2010 Winter Olympics. What the clowns didnt realise was all the ”investment” would just go into housing. Nothing else
    - voisin 2y ago
      Every country tries to attract foreign investment. It’s a major component of GDP. And the difference between Canada ca. 1986 and 2010 versus 2018-2024 is… monetary policy! (Though admittedly 2010 looks pretty similar to 2018, house prices were already starting their insane run up). It’s monetary policy. Housing prices are the fault of governments of various levels (constrained supply at the municipal levels, easy credit at the national levels). It isn’t foreigners, at least not in Canada, NZ, England, etc. and I’d bet money it isn’t in Portugal either.
      - lazide 2y ago
        Sure, but that isn’t the assertion I was replying to! My personal opinion is the wealthy gravitating to a spot are as much about it being a useful ‘nutrient gradient’ on the monetary policy front, after the primary places are exhausted (like the big US cities) or because those places were less accessible now. But the original assertion I was replying to was that those places never had the rich foreign investor thing happen - when they absolutely did!

EVa5I7bHFq9mnYK 2y ago

Wealthy foreigners bring money from the outside into Portugal, so they are net positive. And not only money, but also knowledge, culture and diversity. Local restaurants are happy, local landlords are very happy, who is not happy is local renters. Maybe the tax should be imposed on the landlords' windfall profits instead?

leononame 2y ago
They might or might not be a net positive. I think it's more complicate. It's not just money, but also where the money is going and what it is achieving. E.g. a lot of wealthy foreigners will increase the rent, prices for restaurants and services. Oftentimes, the quality of restaurants/services might go down (because if you cater to a crowd that only stays a couple of months, there's not the same need to get these people to come back. That are changes that are often received negatively by the locals. Foreigners also make use of public services like streets, public transport etc., often without paying income tax.
kranke155 2y ago
I cant help but laugh at the simplification. Net positive for whom? Landlord and restaurants are happy vs the rest of the population (99%). Its a monstruous policy, considering wealthy nomads pay way less tax than locals.
- deleted 2y ago
  [deleted]
- EVa5I7bHFq9mnYK 2y ago
  Sure about 99%? Tourism is 20% of Portuguese GDP. There are 66,000 real estate companies in Portugal. So many more than 1% benefit from wealthy foreigners. The reason there are many poor people has nothing to with techbros with laptops. Better fix your bloated and corrupt public sector.
  - JetSpiegel 2y ago
    The "corrupt public sector" has been focus of complaints at least since the 19th century, across three regimes, but the number of children living on their parents' homes increased after the foreigners with laptops bought the damn houses, either directly, or through real estate funds.