Builders’ Association Asks Parliament for Exemption from IMI Surcharge for Real Estate Developers

20 November 2017

The AICE referred to the tax surcharges’ negative repercussions on companies’ working and the fact that it “overtaxes goods which, for these companies, constitute their primary raw material.”

The Association of Building Constructors (AICE) requested an exemption from the Municipal Property Tax Surcharge (AIMI) from the Budget, Finance and Administrative Modernization Committee of the Portuguese National Assembly, within the framework of the proposed State Budget for 2018.

In a recent meeting with the Parliamentary Committee, at the invitation of the President of the National Assembly, Ferro Rodrigues, an AICE delegation led by its president, César Neto, explained to members of the different parliamentary groups the concern of the majority of its members, and in general, of all small and medium-sized companies operating in the sector, of the tax surcharge’s impact on real estate and land.

The AICE referred to the surcharge’s negative repercussions on companies’ working capital and the fact that it “overtaxes goods which, for these companies, constitute their main raw material.”

The association continues to warn of “price increases that [the tax] will naturally generate in the final product of the industry’s activity – housing.”

“A fundamental asset for the population that is already subject to a heavy tax burden throughout the entire production chain,” AICE stated.

César Neto, president of the association, said it was an “injustice that the AIMI should apply similarly to real estate and luxury lands, both to empty land and as yet unoccupied buildings, which do not generate any revenues. The tax would also be levied on properties and land for development, which, though they may produce similar levels of taxation, are entirely different situations, whether they are in large cities or the interior.

For AICE, the IMI surcharge further exacerbates the massive tax increase “from changes in the equity ratios and significantly penalises the middle class, in particular, who buy their homes from companies in the sector.”

Original Story: Jornal Econômico – Nuno Miguel Silva

Translation: Richard Turner