Funds will invest in residential if it’s profitable
The Portuguese Association of Investment Funds, Pensions and Patrimony (APFIPP), which is a representative of the Real Estate and Pension Funds Investments Management Body (OII) has reacted to the Government’s More Housing policy proposals by stating that funds want to invest more in residential housing bit only if it generates a return.
However, it says that the period of public consultation, which has been extended to Friday, should have involved a much wider public that would have enabled more time to discuss the best solutions for the housing crisis in Portugal.
In a ballpark evaluation of the More Housing programme, the APFIPP highlights positive and negative aspects.
On the positive side, it emphasises the desire to increase housing offer and making it available on the rental market, the streamlining of licencing processes, and a recognition of providing tax incentives to solve the problem.
On the negative side, it says that some aspects of the plan are an attack on private property” in what seems to be a “twisted incentive” for tenants to not meet their rent payments on time.
It also points out that the Government’s proposals make no mention of empty properties that are owned by the State and which could be done up and converted into housing and put on the rental market.
The APFIPP also notes the lack of any reference to the role that could be played by the OII in solving the problem.
Among the measures it proposes is VAT exemption on construction, rehabilitation and/or property reconversion into housing.
It also suggests setting up an Empty Properties Portal which should feature at least 50% of the empty properties held by the State. (as available for reconversion). Such an inventory should be compiled within 12 months.
On simplifying and fast-tracking licencing processes so as to ensure new build architecturally fits in with the surroundings, the APFIPP suggest that municipal councils check that architectural designs/plans meets this specification prior to approval.
It also suggests that Golden Visas should continue for investors who actively intend to increase housing offer in the rental market by granting Golden Visas for people who invest in building or renovating properties for the rental market.
As to Local Accommodation (self-catering apartment rentals for tourists and short-term visitors) — not generally a segment involving the type of financial instruments used by APFIPP members — the association points out that the Government should provide a tax incentive to help with the voluntary transition from Local Accommodation to rental accommodation.
The Government should also take into consideration the importance that LA had on boosting tourism and cities in Portugal, contributing to renovating rundown urban areas which probably would have remained so had Local Accommodation not been introduced.
Photo: Funds People – João Pratas, President of the APFIPP