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Real estate

Empty Houses or Vacant Houses? Know the differences

20 ФЕВРАЛЯ 2023
Темы
Imóveis Mercado Imobiliário Governo Portugal Casas para arrendar Mais Habitação Casas Devolutas
The Government's new measures involve putting vacant houses on the rental market, but this appears to be a controversial measure.
Empty Houses or Vacant Houses? Know the differences
Source: Unsplash
Author: Redaction

The new legislative package of housing has already been disclosed, being under "public discussion" until next month, but there are already several objections to the "More Housing" programme, whose measures generate doubt and controversy. The package covers several segments and its main objective is to combat the housing crisis. There are several axes of society implicated in these changes, which lead many specialists to state their discredit regarding the proposals already on the table. 

One of these measures is the promotion of accessible renting, whose measures include financing for municipalities to carry out coercive works, incentives to transfer to local accommodation, tax exemption for accessible renting and the mandatory renting of vacant houses. Among these measures, the obligation to put vacant houses on the rental market is generating doubts and, according to property owners, it may even lead to a collapse and go beyond constitutional codes.

What are vacant houses?
  • This is a type of property destined for habitation, in an urban area, and which is characterised by a state of unoccupancy for a period exceeding one year. 
The 2006 law establishes that a "vacant property is considered to be an urban building or autonomous fraction that is unoccupied for a year, with evidence of unoccupancy and the inexistence of contracts in force with telecommunications, water, gas and electricity supply companies and the inexistence of invoicing for the consumption of water, gas, electricity and telecommunications".

What are the exceptions to not being considered a vacant property?
  • All properties which are intended to be lived in for short periods of time, such as a holiday home, caravan park, temporary rental or for one's own use, are not considered vacant. 
  • It is not considered vacant during periods when rehabilitation works are underway, with certification given by the municipality.
  • Whose construction completion or issue for use was established in a period of less than one year.
  • If it has been acquired for resale by individuals or legal entities, under the same conditions of article 7 of the Municipal Property Transfer Tax Code, approved by Decree-Law 287/2003, of November 12. 
  • If it has been acquired by entities under the conditions mentioned in article 8 of the Code of Municipal Tax on the Transfer of Real Estate, provided that, in any of the cases, it has benefited (or will benefit) from the exemption of the mentioned tax, for a period of three years from the date of acquisition. 
  • If it is integrated in a tourism development or registered as a local accommodation establishment.
  • If the minimum water and electricity consumption is not reached due to some type of objective impediment to the use of the property, foreseen in Number 2 of Article 1072 of the Civil Code or for reasons of training, permanent care as an informal carer, health or stay in social equipment, duly proven. 
What will happen to vacant houses under the new housing legislative package?
According to the new measures approved by the Government, it will take "administrative possession" of vacant properties, being able to carry out rehabilitation works, if necessary, and guaranteeing all the necessary habitability conditions, and then proceed to put these same houses on the rental market, with payments to the owner. 

According to the Associação Lisbonense de Proprietários, Luís Menezes Leitão states that this is a measure "clearly unconstitutional" and says: "we hope that the Constitutional Court has the opportunity to pronounce itself on the matter and we will not stop doing everything to make this happen, close to the President of the Republic, to the Ombudsman, and supporting our associates if any attempt of compulsory renting appears". 

How many vacant houses are there in Portugal?
It is estimated about 700 thousand unoccupied houses in Portugal, "big numbers" that the Government presents but that do not reflect the reality. There are no concrete numbers of vacant houses in Portugal, and of the slice presented, many of these properties are not vacant, but unoccupied, and are found in "places where people don't want to rent", closed by inheritance disputes, and the president of the Lisbon Landlords Association also guarantees that most of the vacant houses are owned by the State itself, which does not have them rented.

Revolutionary Process underway in the real estate sector?
This is a situation that has already been experienced in a similar way under Vasco Gonçalves' Government, in 1975. At that time, guarantees Menezes Leitão, "municipal councils rented houses by force, placing tenants in exchange for miserable rents", at a time when the PREC (Revolutionary Process in Course) caused "such a trauma to property owners that there were no rentals for decades".

Menezes Leitão underlines: "the Government is going back to 1975 and with this it will achieve, naturally, the total collapse of rentals (...) I am convinced that our emigrants that have houses in Portugal were in panic. We're no longer in a PREC, we're under the Rule of Law, but this is still worrying. The Prime Minister has a history of taking unconstitutional measures - he did this throughout the whole pandemic".

Fundamental rights are being put at stake, which tax expert Tiago Caiado Guerreiro describes as "real estate PREC", which he says is fundamentally a "problem of mismanagement", and recalls what the Constitution provides, which is nothing more than the legitimate right to housing.

Темы
Imóveis Mercado Imobiliário Governo Portugal Casas para arrendar Mais Habitação Casas Devolutas
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