1. The changes in the fiscal field that the PSD/CDS Government intends to promote with the request for legislative authorisation submitted yesterday to the Assembly of the Republic constitute an unacceptable choice in favour of real estate speculation and fiscal injustice.

The diversion of public resources to real estate funds, banks and large real estate owners is at the heart of this tax package, which goes even further than what was announced in September.

2. Among other serious aspects, the following stand out:

• Within the principle of “moderate rent” of up to €2,300, the flat-rate tax (IRS) on real estate income for low-income housing is reduced from 25% to 10%, with no minimum lease duration. Until now, in order to qualify for the 10% rate, landlords had to offer a lease of at least 10 years. In addition to being fiscally unfair, this measure encourages short-term contracts, continuing the speculative spiral and increasing rents each time the tenant changes.

• The extension of the exemption on capital gains on the purchase and sale of real estate - until now limited to owner-occupied and permanent housing - without any restriction on the value or duration of the lease. This will allow, for example, someone who sells a luxury flat, making a capital gain of €1 million, and rents it out for €2,000 per month, to be exempt from paying capital gains tax.

• Contrary to what had been announced, the Government puts forward benefits in terms of corporate tax (IRC). “Moderate rents” of up to €2,300 will now be taxed in terms of IRC considering only 50% of its value, mainly benefiting large companies (since many micro, small and medium-sized enterprises do not even have profits taxable under IRC). If a company rents out property for housing (again, with no price or duration limit), only 50% of that income will count for IRC purposes, even for speculative or luxury rentals.

• Within the “moderate income” principle of up to €2,300, holders of real estate funds will now be taxed at only 5% on the distribution of real estate income, whereas previously they were taxed at 28% (25% in the case of residential rentals). Until now, real estate investment funds were exempt from IRC, but their participants paid tax (IRC or IRS) on the distribution of income generated by these funds – a scandal.

• They put forward the so-called Investment Contracts for Rent (CIA) with a set of tax benefits, including the possibility of exemption from IMT, IMI, Stamp Duty, and VAT, requiring only that 70% of the construction be for residential rental (with no mention of the rental value) and that a 25-year agreement be established. It is guaranteed that, in the event of future legislative changes, the beneficiaries of these CIAs may even receive compensation.

• They worsen the “affordable rent” scheme created by the PS, which no longer takes into account type, area, etc., and now only takes into account whether it is below 80% of the market value in the area. In other words, it is a value completely dictated by the market. Under the PS, “affordable rent” income is already exempt from IRS (even if the owner has dozens of houses). Setting “minimum contract terms of three years or, in the case of temporary residence, three months” will only encourage its proliferation.

• They increase the IMT (property transfer tax) for non-residents to 7.5% (currently this amount is only reached when the property is sold for more than €1,128,287) but exclude this increase if it is for “affordable rent” of up to €2,300.

3. To mislead the population, the Government also intends to increase the housing expense deduction for tenants in their income tax returns from €700 per year (currently) to a maximum of €1,000 per year (first €900 in 2027, then €1,000 in 2028); extend the criteria for exemption from IMT on first homes, when this exemption is currently limited to those under 35 years of age; or reduce VAT on self-construction to 6%.

Contrary to what was promised, this fiscal package, in a completely liberalised housing market with a residual public housing stock (2%), will contribute to an inflationary spiral in rents and house prices.

4. The PCP stresses that, faced with the consequences of the liberalisation of the housing market, the Government is proposing even more liberalisation. Faced with the inefficiency of fiscal measures, the Government is further deepening fiscal injustice. Faced with the need for resources to invest in public housing, the Government is handing these resources over to the greed of real estate speculation. All of this is contrary to what the country needs.

The country needs a different policy to respond to the crisis in access to housing: investment in public housing that mobilises an average of 1% of GDP for this purpose; regulation of the rental market that places limits on rents and forces them down; promotion of stability in rental contracts, with ten years as the benchmark; a reduction in bank instalments by reducing spreads and bank fees (as well as the scandalous profits in the sector); regulation of Local Lodging and control of excessive tourist numbers. This is what is needed to tackle one of the most serious problems facing the workers, the people and youth in our country, rather than a fiscal package designed to serve the interests of those who are the main beneficiaries of a crisis that affects millions of people.