Portugal: The transfer of income from IMT to the national municipal fund is proposed by the left bloc

The coordinator of the Left Bloc (BE) proposes to direct the revenue from the municipal property transfer tax (IMT) to a national municipal fund, which will be distributed based on the principle of territorial coherence, thereby putting an end to speculation in the real estate market.

“We propose to divide the municipal income from speculation; we suggest directing the income from IMT to a national municipal fund that will distribute it based on the principle of territorial coherence, ultimately breaking the link between municipal speculation and revenues,” said Mariana Mortágua in her closing speech at the European seminar on housing organized by Left Europe and BE in Porto.

Speaking about this as a "proposal for the future that can make a real difference in housing in Portugal," the representative of the bloc believes that municipalities cannot and should not rely on the incentive of speculation in the real estate market. She added, "This proposal definitively ends this perverse connection, as a result of which speculation has become municipal policy."

In her opinion, the income from IMT can and should be used for local housing programs, and it is necessary to put an end to the "regulation that exists in Portugal, which involves the central government and municipal authorities of all political parties, namely speculation in the real estate market." Cities and towns should serve the residents and communities that live in them, "rather than being a set of pieces in a game competing for income from speculation," she noted.

Over the past 10 years, income from IMT has increased by 336%. And who benefited from this? In order: Lisbon, Cascais, Loulé, Porto, Oeiras, Sintra, Vila Nova de Gaia, Lagos, Albufeira, and Grândola. No one benefited; on the contrary, the enthusiasm of the government and municipalities regarding rising housing prices has become a policy, a source of pride in political decisions.

According to the BE coordinator, 40% of the income from IMT is in Lisbon, and the rest is distributed among the municipalities in the coastal area, where "speculation, housing shortages, and environmental issues are unacceptable conditions that make life difficult for those who want to live in these municipalities." The rules for distributing income from IMT are "an encouragement of speculation and a slap in the face of territorial unity," she concluded.

Tax revenues continue to be the main part of municipal income, accounting for over 35%. In 2022, there was a significant increase in IMT collection. "IMT continued to grow and increased by approximately 26.1%, which amounts to about 351 million euros. Thus, IMT has significantly increased and for the first time exceeded revenues from IMI," said the coordinator of the Anuário Financeiro dos Municípios Portugueses, emphasizing that these results reflect the rise in property prices in municipal accounts.