“Disproportionately restrictive” and capable of negatively impacting tourist supply, especially in coastal and rural areas, “with no guarantees that they would increase the number of houses available to rent”. With this ruling, the European Commission blocked Ireland’s plans to tighten local housing (AL) rules, in a legislative package that the Dublin government wanted to implement in March, as a way to put more houses on the rental market.
In a decision issued a few days ago, Brussels believes Ireland has “failed to present information and evidence” that these measures would be essential to respond to the housing crisis and to facilitate the transfer of up to 12,000 homes from the AL to long-term housing. to improve. term rent, still not in the “presentation of an alternative package, more lenient, which could pursue the proposed goal”. Highlighting disproportions such as the “geographical non-containment” of the proposals for more densely populated areas – “where the AL is more likely to have an effect on rents” – the Irish plan is now subject to an analysis period that will see it freezes until the end of the year.
Will the Mais Habitação package suffer the same fate? At the moment, the European Commission says only that it is “awaiting information” from the Portuguese government about the measures, which “will be analyzed in the light of European rules”.
In response to questions asked in March by Nuno Melo (CSD MEP) and six PSD MEPs (Cláudia Aguiar, Álvaro Amaro, José Manuel Fernandes, Maria da Graça Carvalho, Lídia Pereira and Paulo Rangel), Brussels guarantees that ” it will monitor” the subject and consider possible measures, “including if Portugal does not notify, under the conditions of the Directive on services in the internal market”. A claim that the Associação do Alojamento Local in Portugal (ALEP) had already addressed to the European institutions. Also in March, ALEP President Eduardo Miranda had a series of meetings in Brussels, including with those MEPs, where he warned against “measures that create blind and disproportionate situations contrary to European law”, namely the of barriers “to the development of business activities and entrepreneurship”, protected by that directive.
In order to reinforce the obligation to provide information before adopting the measures, the Commission also underlines in the said reply that Articles 49 and 56 of the Treaty on the Functioning of the European Union contain restrictions, such as those relating to short-term accommodation, duration, the principles of “proportionality” and “being appropriate and fundamental to protect public interest objectives” are mandatory. “So far (the reply is dated 28 April), the Portuguese authorities have not informed the institutions of the plan in question,” says the Commission.
Extraordinary contribution raises questions
Despite being submitted in connection with the government’s first will and testament, when it first revealed Mais Habitação, the measures strongly contested by the sector could be blocked in Brussels due to disproportionality or lack of guarantees that they can contribute to get more homes on the rental market. It is also the case of the period of validity limited to five years for new AL permits or the creation of an “extraordinary contribution on local housing” (CEAL), which aims to tax the houses covered by this regime in an tranche of 20% “to fund an affordable housing policy” and which is intended to vary “according to operating income, the evolution of rents and the weight of local housing in the area”. And that causes problems even at a national level.
“CEAL raises several legal doubts,” admits Rogério Fernandes Ferreira in regular communications from RFF Lawyers, highlighting, among other things, its potential disproportionateness, since the AL corresponds to only 3% of housing units in the country, “so that it can cast doubt on the effectiveness of this measure given the small size of local housing in the national housing market as a whole”. It also points to the potential unconstitutionality of the measures, “if only because such a contribution is levied on presumed income, contrary to the requirement that tax be levied on real income, and, on the other hand, for violation of the principle capacity,” the tax official unmasks in the company’s newsletter.
Fernandes Ferreira also anticipates huge “tax litigation potential” in the same article, as owners who have relinquished for the purpose of exploration in AL, even if they don’t receive the revenue, could be sued to pay the tax contribution. “It is most likely, and first of all, a covert way to replace one taxpayer with another, without the latter being able to pay, which is unconstitutional,” he argues. “(…) Finally, this alleged tax liability may, indirectly but impermissibly, restrict the right to property and private initiative and economic freedom, and even be unconstitutional for violating the principle of equality, since there are identical situations (short-term rent ) with a different tax treatment, but which show an identical tax capacity (…)”, he concludes in the same presentation.
The intended changes to the AN may therefore ring European bells. But even before that, the package itself could be stopped for lack of proper communication with the European Commission.
Source: DN
