Race to house purchase takes IMT revenue to highs

The IMT's new record reflects the good moment the real estate industry is experiencing, with sales growing significantly and prices accompanying this trend, with the help of new foreign investors and tourism.

 

Data from the Budget Execution Bulletin of the Directorate-General for the Budget show that IMT revenues fell sharply between 2007 and 2012, with the slowdown in the lending of housing loans, the construction sector in general, strong crisis that the country went through at that time.

 

In 2013, with the troika midway through its regular examination in Portugal, the first signs of recovery began. Revenue rose 23% due to rising property prices already starting to feel and not so much due to the significant number of sales.

 

In 2014, IMT's revenue again approached the 500 million euro barrier, this situation evidenced sales and triggered the first advance in four years (in that year 148 518 houses were sold - according to APEMIP Professionals and Real Estate Mediation Companies.) Since then the ascendancy has been progressive and the industry estimates are of preservation of growth in 2018 and in the coming years.

 

An average annual increase of 6% in the price of houses in Portugal over the next five years, coupled with strong demand and supply shortages, was the information verified in the last market survey conducted by RICS and CI (Confidencial Imobiliário). "The residential market is benefiting from the increase in new credit activity, and the imbalance between supply and demand is allowing prices to approach pre-crisis levels," Ricardo Guimarães, director of CI, said.

 

Pedro Lancastre, director general of JLL Portugal points out that "2017 was a spectacular year for the market" and adds that it is no longer "a path of recovery, but expansion".

 

It is known that, in 2017, there was an increase of sales of 20% and prices rose 11%. In some areas of Lisbon, the increases were more than 30%.

The Idealista price index put at the end of last year the average price of the square meter in Lisbon near the three thousand euros. It is precisely in Lisbon that the peak of real estate takes place and this is reflected in the revenues of the municipality.

 

In the capital, unlike the rest of the country, the tax paid on real estate transactions (IMT) is more profitable than IMI - the great local government revenue champion, and in 2017 generated $ 1461 million. euros. In the budget for 2018, the municipality anticipates an increase of 36.7 million euros over the previous year and justifies: "The reality of the past two years has been a historically high level of this tax through the dynamics of the real estate market, which higher demand for real estate, also fueled by non-residents and by urban rehabilitation of the city. "

 

As noted above, Gold visas and the general interest of foreign investors clarify part of the rise in sales and real estate prices. The monitoring of CI on transactions in the city of Lisbon reveals that on average the value invested by foreigners is 40% higher than that of the Portuguese. On average, the citizens of other countries pay 338 thousand euros, while the Portuguese do not go beyond the 244 thousand euros.