Portugal backtracks in its fiscal policy. French retirees will no longer be treated as well. The left majority in power, led by the Prime Minister, will tax the income of foreign retirees in Portugal up to 10%.
For several years, foreign retirees were exempt from income tax for 10 years. A considerable tax gift, which was decided at the height of the economic crisis that affected the country and which was intended to attract affluent consumers and investors to revitalize to the Lusitanian economy. Several tens of thousands of French people have settled in Lisbon and the Algarve.
Portugal is doing better and has recovered well since 2015. This fiscal policy was frowned upon by Portuguese citizens who pay heavy taxes. It had the disadvantage of driving up property prices considerably in Lisbon and elsewhere.
An 80 billion euro loan to Europe
But this tax novelty would only take effect for newcomers. This country was one of the most severe victims of the crisis in 2011-2012. He even had to apply for a loan to Europe of more than 80 billion euros while undergoing a dramatic austerity cure that has deepened the depth of the recession.
Since, unemployment has been halved and the budget deficit has almost disappeared. The accounts of Portugal are in balance, for the first time in 40 years. This situation thanks to a policy against the austerity, supporting the purchasing power of households by temporarily letting go of the deficit and the rest and it is a bit of luck.
An involuntary gift that the Portuguese right has made to its political opponents by leaving a large margin of expenditure and the fall in interest in the euro zone are crucial elements for a country which has a public debt of more than 120% of its GDP.
