Tax incentives and preferences in real estate lead to „capital imbalances“ and attract investments of two billion euros a year in the sector that could help other sectors, reports Público, based on reports from real estate company representatives to Investigate Europe, a team of investigative journalists consisting of 11 countries.
Real estate industry specialists point out that there is no need to take advantage of offshore tax havens thanks to the tax incentives that exist in Europe and the US.
In Portugal, writes Público, incentives such as inheritance tax exemption and capital gains on property funds make housing a very attractive investment for high net worth individuals, foreign pension funds and banks. However, such overinvestment leads to a „misallocation of capital“. In other words, low property taxes end up diverting investment to other sectors.