Government rejects ban non-dom property investment ban

 In News, Property, Real Estate

The Portuguese government has ruled out the idea of banning the sale of properties to non-resident foreigners because it would represent a “hard blow” to the economy.

The idea, aimed at curbing property market speculation and inflation in the property market as supply remains tight and demand high, is not new.
Canada has prohibited non-resident overseas investors from buying property, while in the Balearic Islands the regional government there announced it was doing the same to slow rising house prices.
However, real estate professionals quizzed by the online news source ECO said Portugal could not afford the luxury to introducing such measures, and warned of the strong negative impact this would have on the sector, and on the economy as a whole.
At the present time the Portuguese government has no plans to follow the example of either Canada or non-mainland Spain.
But according to the Guardian, officials on the Balearic Islands want to ban non-residents from buying property as soaring prices in Mallorca, Menorca and Ibiza drive local people out and create ‘ghost villages of empty homes’.
At the present time non-residents have bought around 7% of houses in Portugal, while purchases from overseas resident and non-resident nationals account for between 10-15% of the market.
According to statistics from the Portuguese statistics institute INE for the third half of 2022, out of 42,223 houses sold, only 2,767 (6.6%) were purchased by non-domiciles. EU resident buyers account for a total of 1,486 properties.
The Bank of Portugal’s figures for the 12 month ending in June 2022 show that non-residents represented 11.7% of transactions in Portugal with non-domicile buyers leading purchases averaging €414,000, around 143% above the average value of transactions involving buyers who are resident in Portugal.