The European Commission suggested that Portugal review the way housing is taxed, advocating less weight on taxes paid when purchasing a house and a greater incidence on recurring taxes on properties, such as IMI.
According to , a website specializing in economics, the recommendation comes within the scope of the European Semester and aims to encourage owners to place empty, underused or degraded houses on the market, in a context of strong pressure on house prices.
Brussels wants less weight on IMT and more on IMI
In the document addressed to Portugal, the European Commission defends a change from transaction taxes, such as IMT, to recurring taxation on property. This change could include updating the market value of properties, the basis used to calculate IPTU.
According to Brussels, this change would create incentives for houses without effective use to be placed on the market. The logic is simple: if keeping empty properties becomes less fiscally advantageous, owners may have more reasons to sell, rent or recover these properties. Still, the recommendation does not mean that the IPTU will increase immediately. Any change would always depend on political decisions in Portugal and legislative changes.
The reason is in the empty houses
The European Commission considers that Portugal has a comparatively high percentage of houses that are not used as first homes. Among them are empty, degraded or underused properties.
At the same time, Brussels highlights that the country has recorded one of the largest accumulated increases in house prices in the last decade. Since 2015, nominal prices have more than doubled, with greater pressure on urban coastal areas.
It is this combination that worries the Commission: many families face difficulties in accessing housing, while a relevant part of the housing stock is not being used as their main residence.
The Commission recognizes that Portugal has increased investment in social housing in recent years, partly with support from European funds. Still, he considers that the number of affordable and social homes remains below the European Union average.
ECO recalls that, within the scope of the Recovery and Resilience Plan, ten thousand affordable homes were planned to be financed by European funds. According to data from the National PRR Monitoring Commission, released at the end of April, only 200 had been delivered to families, while 404 were ready but had not yet received the keys and 2,194 were still under construction. For Brussels, public investment remains essential, but it will have to be accompanied by greater participation from the private sector and solutions such as cooperative housing.
Temporary subsidies are also suggested
In addition to the fiscal review, the European Commission suggests temporarily granting subsidies to the most vulnerable families while the supply of housing does not increase. The idea is to provide some immediate relief to those most exposed to the housing crisis, without replacing the structural measures needed to increase the supply of homes.
Brussels also warns of the need for better coordination between Government, local authorities, urban planning, housing, spatial planning and transport. According to the Commission, investment and financing mechanisms remain too fragmented and ad hoc.
Recommendation does not yet have automatic effect
Brussels’ proposal should reignite the debate on housing taxation in Portugal. Increasing the weight of IPTU could put pressure on owners of empty homes, but it would also raise doubts about the impact on families who own properties without much financial liquidity.
For now, this is just a European recommendation. There is no automatic increase in IPTU or immediate changes to the current rules. The central reason, however, is clear: the European Commission understands that Portugal must use taxation to combat the existence of empty houses and try to increase the supply of housing in a market where prices continue to make access to housing difficult.
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