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VAT at 6% and “golden visa” might be the keys for the recovery
29 May 2020 | Ana Tavares

Real estate developers and investors believe that the reduction of the VAT for construction to 6% and the relaunch of the «golden visa» program might be the keys for the recovery of the Portuguese real estate market after the pandemic.

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This what is shown in the latest Portuguese Investment Property Survey a sentiment and expectations survey carried out by  Confidencial Imobiliário together with APPII on a panel with the most representative real estate developers and investors in Portugal.

Besides these measures, operators also pointed out as important the implementation of temporary tax exemptions for some taxes and the possibility of filling in deeds digitally.

In this first survey carried out under the effects of the Covid-19, operators showed a high resilience within the current context. Only 21% stated they planned to delay projects under construction and 31% pointed out the possibility of offering discounts to maintain the levels of demand. Many considered implementing other proactive strategies, including resorting to virtual visits in order to increase sales (59% probability), but also delaying projects which are still on the licensing stage (43% probability).

Prices and sales should drop in the coming months

The panellists considered that the pandemic left a generally negative impact on the market, both in prices and in sales and pointed out that transactions were the most affected.

On a 3-month timeline, the trend is similar, with prospects of new drops both in prices and transactions throughout the 2nd quarter. On an annual timeline, the market anticipates an 8.4% drop in prices and a 15.7% drop in sales.

Within the current context, the economic situation is now seen as the real estate sector’s main obstacle with the pressure index at 85%, compared to the 45% registered during the previous quarter. Bureaucracy, especially licensing processes, remains the second main restriction, with an 82% index.