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Treasury Selling 134 Seized Properties Per Month

21 November 2018

A change in the law prevented the Tax and Customs Authority from selling seized properties that are debtor’s permanent homes.

The electronic sale of assets seized by the tax authorities is expected to increase again this year. So far, there have been 3,066 of these forced sales this year, almost 50% of which were homes, land, commercial and industrial buildings and garages. Since the beginning of this year, the Tax and Customs Authority has auctioned a total of 1,475 seized properties, an average of 134 per month.

The assets that have already been sold (including real estate, vehicles, shareholdings and others) are being followed by another 893 electronic auctions that the tax authorities have in progress. Considering the pace of sales since the beginning of the year, the total number of forced sales is expected to exceed last year’s total (3,166 auctions) will be exceeded (see infographics).

The assets do not include the totality of assets seized from delinquent taxpayers (individuals and companies) by Portugal’s tax authorities, just those in the Comprehensive Forced Sales Management System (SIGVEC), which excludes, for example, garnished wages, pensions or other movable assets.

SIGVEC was created in 2005, providing for the digital management of the whole sales process for the seized assets, following the range of requirements under the law. Those include a written notification of proceedings to the taxpayer in question, verification that the debt is not being challenged in court and, where the real estate has been seized, that it is not the debtor’s permanent home.

In May 2016, a legal mechanism was created to prevent the sale of this type of home. Although the debtor’s permanent residence may still be seized, the treasury cannot sell it. After successive years of growth in the sales of seized properties by SIGVEC, 2016 saw the first yearly decrease.

Although the tax authorities may no longer sell off a debtor’s permanent residence, real estate is the type of asset that the tax authorities most frequently seize. Among the more than 400 properties currently on auction, there are several plots of land and garages, in addition to homes. Examples of assets on sale include a two-bedroom home in Algueirão with a base bidding price of €47,999 euros, and another similarly sized home in Matosinhos, which is on the block for €103,000, though this last property has no base bid.

In 2017, the Tax Authority also sold 975 seized vehicles, and this year 1,000 have already been auctioned off, with another 222 auctions pending. Since the beginning of the year, the tax authorities have published 9,018 advertisements for seized assets going on auction. Some are removed from sale after the corresponding debts are paid at the last minute.

The Tax Authority normally seizes thousands of asset each year, as the mechanism leading to the seizure is activated as soon as any taxpayers miss successive deadlines for the payment of a particular tax debt. Many of the seizures are returned after the debts are repaid. Moreover, only some of the seizures are sold through the system, since seizures generally target assets that are sold off easily and with the least possible cost. More than 80% of seizures involve bank accounts, rents, salaries, pensions or loans to third parties.

Original Story: Diário de Notícias – Lucília Tiago

Photo: Nuno Pinto Fernandes / Global Imagens

Translation: Richard Turner