Portugal plans to introduce tax on real estate fortunes

Portuguese Prime Minister Antonio Costa gestures during a debate at Parliament in Lisbon. (AFP)
Updated 15 October 2016

Portugal plans to introduce tax on real estate fortunes

LISBON: Portugal will introduce a tax on real estate fortunes above 600,000 euros ($661,000) in 2017 to help pay for pensions, the government has said.
The tax, fiercely opposed by the real estate sector which fears it will put the breaks on foreign investment, was included in Socialist Prime Minister Antonio Costa’s draft budget for 2017.
“The taxation of large real estate fortunes will enhance the sustainability of our social security system and contribute to fiscal justice,” he told parliament.
If the value of all real estate owned by a taxpayer surpasses 600,000 euros ($661,000), a levy of 0.3 percent will be applied to the amount above this threshold, according to the draft budget.
The government expects the measure will raise 160 million euros ($176 million) each year.
“The taxation of real estate fortunes will make it possible to raise pensions,” said Catarina Martins, a lawmaker with the far-left Left Block party which backs the minority Socialist government.
The threshold of 600,000 euros will spare most beneficiaries of the country’s so-called “golden visa” scheme, which has helped fuel demand for real estate among wealthy foreigners from outside the European Union.
Cash-strapped Portugal in October 2012 started offering “golden” visas to non-EU citizens willing to invest 500,000 euros in property, make a capital transfer of one million euros or create 10 jobs.
The Portuguese visas allow foreigners to travel within Europe’s 26-country Schengen free trade zone without restriction.
Portugal has issued nearly 4,000 “golden” visas that have generated investments of 2.37 billion euros since the scheme was launched at the end of 2012, most of them to Chinese, Brazilians and Russians.
The Association of Lisbon Homeowners (ALP) criticized the new tax, calling it an “unprecedented fiscal attack against the real estate sector.”
The measure will also affect foreign buyers who have flocked to Portugal to take advantage of tax exemptions granted to European retirees who move for the first time to the country.
French nationals account for 27 percent of all foreign real estate buyers, followed by Britons who account for 18 percent.
“With this measure, the government has shot itself in the foot. Portugal can’t constantly change the rules of the game,” added Henrique Moser, a lawyer with the Telles law firm which specializes in real estate.
The government also decided to raise its tax on home rentals for tourists, which have up until now been lower than those applied to long-term rentals.
The measure comes as home rental websites such as Airbnb have seen their business soar in Lisbon and other Portuguese cities.
The number of people who have stayed in accommodation in the Portuguese capital has doubled to 433,000 in 2015 from 213,000 the previous year.
Costa came to power in November 2015 after his party teamed up with the Communists and Left Block to oust a center-right administration.
The tiny leftist parties did not formally join the new government, but Costa relies on them for a majority in parliament to pass legislation.


Electric luxury vehicles, SUVs ‘more likely to cause accidents’

Updated 23 August 2019

Electric luxury vehicles, SUVs ‘more likely to cause accidents’

  • As EV sales rise, French insurer AXA warns that drivers are struggling to adapt to cars’ rapid acceleration

LONDON: Electric luxury cars and sport utility vehicles (SUVs) may be 40 percent more likely to cause accidents than their standard engine counterparts, possibly because drivers are still getting used to their quick acceleration, French insurer AXA said.

The numbers, based on initial trends from claims data and not statistically significant, also suggest small and micro electric cars are slightly less likely to cause accidents than their combustion engine counterparts, AXA said at a crash test demonstration on Thursday.

AXA regularly carries out crash tests for vehicles. This year’s tests, which took place at a disused airport, focused on electric cars.

Overall accident rates for electric vehicles are about the same as for regular cars, according to liability insurance claims data for “7,000 year risks” — on 1,000 autos on the road for seven years — said Bettina Zahnd, head of accident research and prevention at AXA Switzerland.

“We saw that in the micro and small-car classes slightly fewer accidents are caused by electric autos. If you look at the luxury and SUV classes, however, we see 40 percent more accidents with electric vehicles,” Zahnd said.

“We, of course, have thought about what causes this and acceleration is certainly a topic.”

Electric cars accelerate not only quickly, but also equally strongly no matter how high the revolutions per minute, which means drivers can find themselves going faster than they intended.

FASTFACT

Accident rates among luxury and SUV electric vehicles are 40 percent higher than for their combustion engine counterparts.

Half of electric car drivers in a survey this year by AXA had to adjust their driving to reflect the new acceleration and braking characteristics.

“Maximum acceleration is available immediately, while it takes a moment for internal combustion engines with even strong horsepower to reach maximum acceleration. That places new demands on drivers,” Zahnd said.

Sales of electric cars are on the rise as charging infrastructure improves and prices come down.

Electric vehicles accounted for less than 1 percent of cars on the road in Switzerland and Germany last year, but made up 1.8 percent of Swiss new car sales, or 6.6 percent including hybrids, AXA said.

Accidents with electric cars are just about as dangerous for people inside as with standard vehicles, AXA said. The cars are subject to the same tests and have the same passive safety features such as airbags and seatbelts.

But another AXA survey showed most people do not know how to react if they come across an electric vehicle crash scene.

While most factors are the same — securing the scene, alerting rescue teams and providing first aid — it said helpers should also try to ensure the electric motor is turned off. This is particularly important because unlike an internal combustion engine the motor makes no noise. In serious crashes, electric autos’ high-voltage power plants automatically shut down, AXA noted, but damaged batteries can catch fire up to 48 hours after a crash, making it more difficult to deal with the aftermath of
an accident.

For one head-on crash test on Thursday, AXA teams removed an electric car’s batteries to reduce the risk of them catching fire, which could create intense heat and toxic fumes.

Zahnd said that studies in Europe had not replicated US findings that silent electric vehicles are as much as two-thirds more likely to cause accidents with pedestrians or cyclists.

She said the jury was still out on how crash data would affect the cost of insuring electric versus standard vehicles, noting this always reflected factors around both driver and car.

“If I look around Switzerland, there are lots of insurers that even give discounts for electric autos because one would like to promote electric cars,” she said.