Lisbon mayor against more property taxes

Lisbon’s Mayor has hit out at proposals from the left-wing party Bloco Esquerda and centre-right PSD to hike property taxes in a bid to prevent the city’s property market from overheating.

Instead, Fernando Medina has a proposal before parliament that could help fight the lack of affordable housing in Lisbon.

“What I am proposing is a strong reduction in taxes on landlords that rent out their properties via long-term rental contracts.”

Foreign investment from ordinary buyers, speculators and funds has seen property prices in Lisbon’s central area increase by up to 20% over the past year while prices in Lisbon suburbs such as Odivelas have soared 17% in 12 months and 7% on the Lisbon-Cascais riverside line (Marginal).

The cost of just renting a room in central Lisbon has reached €3,000 in some cases while buying a T0 Studio flat of 32m2 will cost €334,800.

In Lisbon’s Príncipe Real too, T1s (one-bedroom flats) are being rented out for €2,358 per month while in Lisbon’s downtown Rua do Crucifixo a Studio flat little bigger than a postage stamp (27m2) will set a buyer back €300,000.

Economists and analysts say it is only a question of time, as demand outstrips supply, for prices to rise to a speculative level and the bubble bursts with disastrous effects on the city’s and the national economy.

Mayor Fernando Medina says the so-called ‘Robbles Tax’, named after the left-wing MP who suggested it, will not solve the problem and put a brake on Lisbon’s over-heated property market.

He said that several months ago a proposal was put to Portugal’s parliament to control property speculation.

MP Ricardo Robbles, a Lisbon City councillor, specialist in urban rehabilitation and energy efficiency and one of the founders of the Bloco Esquerda who had vehemently criticised the current property speculation in Lisbon and other Portuguese cities caused controversy recently when it was discovered that he himself had speculated on the demand for property in Lisbon by buying and doing up a property he later put on the market for €5.7 million for tourist accommodation.