Portugal to scrap ‘unjust’ tax breaks for foreign residents | Hacker News Reader

Portugal to scrap ‘unjust’ tax breaks for foreign residents

theguardian.com

32 pointsGys8 comments

Finally, as many of us are already having hard time surviving in current economy, only to have the housing problem getting worse for people getting hold of special favours and golden visas.

Note the lack of any dates in this "announcement", this makes it even worse. If you want to scrap it, announce it on a Friday evening, to avoid even more speculation now that the existing people are grandfathered in. The same finance ministry did just that when they scrapped the T-bills with high interest rates that were depleting the banks' profits.

As is, this was probably an off-the-cuff remarks on the town hall-style PR stunt imported from the USA. I believe it when I see it.

Stopping tax breaks for highly skilled professionals is not a good move IMHO. This is how you attract international companies that cannot strictly rely on the local work pool to operate. Also, is the number of such professionals that high that they distort the local economy?

On the other hand, reneging on the flat 10% on foreign pensions sounds like a good move. Pensioners looking for their place in the sun can be numerous and can really distort the house market and even the fabric of the society in small towns, while not adding anything to the production output of the country.

But still, both look like populist measures aimed at quashing protest. Still no talk about the elephant in the room, that is AirBnB.

I spent a year in Portugal, also due to the tax breaks. Rent and cost of living in modestly desirable areas are in the realm of the delusional, which is why we left as soon as we could. In our case, we signed our rental lease right before the war broke out in Ukraine, which triggered a significant increase in rents across Europe, accelerating a trend that was going on for some years thanks to AirBnB.

In some areas in Portugal these increases were, again, absurd. Rent increases of 800% were common. The owner of the place we rented wanted us out before we even moved in because they felt they missed out on some lucrative get-rich-quick scheme, and they harassed us for 10 months. Many of these places never rented out at all for the asking prices (think “150 m2 3 bedroom house, 12.000 EUR per month”, lol)

Few of those that move to Portugal participate in the local business environment, at least not in IT. Wages and contracting rates are absurdly low, so those folks coming from abroad do so with non-Portuguese contracts in hand. The low wages are why international companies settle there in the first placed. Everyone wants to near-shore (look at eastern europe) and all these businesses look for the proverbial “25 years experience with K8S” and are offering EUR 15 per hour. Many skilled Portuguese leave the country to try their luck in other places.

Getting rid of these tax breaks won’t do anything for the problem they need to solve, because the housing problems are not due to the kind of professionals that are looking to benefit from these tax breaks. The housing situation in Portugal is _dire_ as there simply isn’t enough housing stock that targets “normal” Portuguese. New builds are all for the “exclusive” and AirBnB markets. The measures the Portuguese Govt. needs to take (improve wages, increase affordable housing stock) to resolve this issue are unpopular with the monied crowd, so they do something like this that makes everyone feel good, but will not move the needle in terms of resolving the issue.

Will it reverse the damage done?

This is very stupid move - Socialists just can't help themselves. I moved to Portugal from the UK 6 years ago partly for tax reasons. NHR Tax regime has been a huge success attracting thousands of Entrepreneurs and Professionals - they spend a lot here and have transformed the local economy - many even start doing business locally. 10 years ago Portugal was a basket-case economy looks like they want to return to that.

We want to return to university students being able to afford housing, instead of having landlords selling out to foreigners hunting golden visas and tax reductions.

Socialists who socialize the costs and privatize the profits.

Now that they've atracted professionals and entrepreneurs from other places with less fortunate weather at the cost of alienating their younger generation, they can safely stop the tax breaks. It only fuels rent seeking. The breaks should have been time limited to begin with. The professionans won't be leaving Portugal anyway due to the nice weather and the good food.

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