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Portuguese State Lacks Basic Control of its Property Holdings

15 January 2021 – Ana Custódio

More than a decade has passed, and the Portuguese government has yet to ascertain how many properties it owns, a flabbergasting state of affairs which raises a series of doubts.

In 2009, intending to identify its real estate holdings, the Portuguese government launched a programme to create an inventory of the state’s assets. Nevertheless, after all these years, work on the survey of publicly-owned assets has yet to begin, and the review of privately-owned assets is incomplete, outdated and riddled with errors.

Years of rising housing prices and in the midst of a pandemic, in which it is increasingly difficult to access affordable housing, is generating growing discontent. Many blame the state for its failures to make up for these shortcomings, while also neglecting public housing stock.

Although a review by the Court of Auditors reported that there are listings for 9,495 state-owned properties in the country, 14% for housing, under the State Property Information System of the Directorate General of Treasury and Finance (DGTF), the real number of properties remains unknown. The Ministry of Infrastructure and Housing itself has stated that it is trying to solve the problem. However, an audit of the state’s real estate assets concluded that the platform itself is weak and rife with systemic flaws.

The registration database, which is managed by Portugal’s Tax Authority, comprises 62,597 registrations. In contrast, the land registry database, in turn, organised by the Institute of Registration and Notary Affairs (IRN), includes 18,671 registrations.  The audit as a whole lacks a significant level of data, including the type of real estate and its location, and many neither have the owner’s name nor list the property’s value. The problems with the system are so extensive that observers have identified many duplicate entries.

Portugal’s housing policy is under scrutiny, even as the current government has set up an investment fund geared towards rehabilitating property (initially only public) to increase its stock of affordable rental housing under the National Building’s auspices Rehabilitation Fund (FNRE).

The first step in remedying the current state of affairs would require the Directorate General of Treasury and Finance to identify its existing assets correctly. The real estate sector, which is undergoing a great deal of stress due to the pandemic, is not well-served by a government that lacks even the most basic understanding of the extent of its holdings. Greater control over Portugal’s state-owned property holdings, and increased knowledge of properties in the private sector, would allow for greater consistency in housing valuations, boost the affordable housing market, and facilitate an increase in transactions in the real estate market.

Translation: Richard Turner