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As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

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Re: As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

#61

Post by lampington »

quonn wrote: post #12
jmyeet wrote: post #8

Expats can be helpful to a country like Portugal but it has to be done correctly. And of course it hasn't. What Portugal needs to do is: 1. Ban Airbnb and other short-term housing other than renting out a room in your house ; 2. Provide a huge stock of social housing, meaning housing at an affordable price only available to natives; and 3. Restrict foreign ownership of huge swathes of the country. This could be as si…

> 3. Restrict foreign ownership of huge swathes of the country. This could be as simple as "new construction only". This will make the problem worse as the Portuguese will complain that the foreigners own the beautiful modern buildings. Additionally it‘s important to keep in mind that this is not feasible for EU countries with the four freedoms. It would be like Florida banning ownership of existing houses for Califo…

I'd go the other way with the buildings -- there are lots of unmaintained or even semi-ruined buildings, even in central Lisbon, which would benefit from foreign investment. Some of them are probably that way due to inheritance disputes, but others, I think, just need an owner that values their age. Maybe allow foreign ownership of older buildings over some particular size, or only if they do significant repairs, or something like that?

Re: As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

#62

Post by moltar »

I spoke to a real estate agent about the housing problem. And it’s not an obvious one. And one very few ever talk about.

The problem is that most builders need to borrow money from the bank for a project.

But the government red tape can take from 1-3 years. Plus the building phase can be 1-2 years. So a total of 2-5 years.

Builders cannot property plan project schedule, finance schedule and are feeling excessive risk.

Most builders are simply not interested in taking this risk and thus not much is done.

Another major issue the government of Portugal won’t tell you about is the fact that they own a ton of units downtown Lisbon in a completely decrepit state and aren’t doing anything about that.

It’s easy to blame nomads though…

Re: As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

#63

Post by moltar »

mcntsh wrote: post #15

What a hilariously short-sighted policy from Portugal. Offer visas for rich remote workers and also exempt them from contributing to health system, and give them huge tax discounts. It's like the Portuguese government actually hates its citizens.

Government funding from income taxes is small in comparison to VAT and other taxes.

Re: As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

#64

Post by p_l »

quonn wrote: post #27
reaperman wrote: post #24

Earlier quoted context omitted.

88% being the marginal rate? I’m assuming if you’re paid €80,000 in a year you take home more than €9,600 The way you wrote this makes it sound like people only take home €9600 on €80000 and thats rather misleading.

It‘s not misleading. You take home 9600 in my opinion. What you call the marginal rate is applied to the full salary as far as I know. And the social security is also applied to the full amount unless the person is employed by a Portuguese company that would pay half. Even the most optimistic tax accountants say around 70% minimum is to be paid with various options applied. That would leave 24.000. Portugal has many…

I'd suggest you either check if you're not reading "post-tax income" as tax, or change the accountants. Even most miserable accounting doesn't get 70% on 80k annual salary.

Re: As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

#65

Post by somewhereoutth »

quonn wrote: post #18
mcntsh wrote: post #15

What a hilariously short-sighted policy from Portugal. Offer visas for rich remote workers and also exempt them from contributing to health system, and give them huge tax discounts. It's like the Portuguese government actually hates its citizens.

As I wrote elsewhere, paying into the social security in Portugal with a salary of 80.000 Euros means paying 88% in taxes and social security. Do you think that is reasonable? Additionally everyone I know has their own insurance and pays for all of their health bills. And that‘s only for urgent things, planned surgeries are usually done in the home country anyway.

Nonsense. My gross might not be quite 80K, but my total tax burden including social security is about 33%. The healthcare system here is a mix of state provided urgent/serious care - to a high standard - and private but very cheap options for more mundane matters. Furthermore, that social security contribution buys into one of best defined benefit pension schemes still available anywhere.

Re: As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

#66

Post by somewhereoutth »

quonn wrote: post #51
lastdong wrote: post #44

Earlier quoted context omitted.

Employed by a portuguese company 80000€ / year is taxed average 42.8%, take home after tax: 45728€ This gives you a monthly pay after tax of 3811€ (way above average in the country, which unfortunately is really low)

Right. But as a nomad you cannot just give up your own health insurance and you cannot just stop paying into a foreign retirement fund yourself. Portugal won‘t allow you to deduce that, of course, and it‘s another 1500-2000 per month to subtract in case of private insurance for example. Leaving around < 2000 net. And as I said that‘s without the mandatory social security problem on foreign income.

Assuming you/your employer are paying social security contributions, then you can give up your own health insurance. People in Portugal tend to have private healthcare plans for everyday stuff, but they are insanely cheap. For urgent/serious things, the public system is effective enough.

However you will need to contribute for at least 15 years before you qualify for a pension, and as you say there are no deductions for private pension plans, so you lose out there.

I suspect you are being 'taken to the cleaners', but not necessarily deliberately by anyone.

Re: As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

#67

Post by somewhereoutth »

moltar wrote: post #62

I spoke to a real estate agent about the housing problem. And it’s not an obvious one. And one very few ever talk about. The problem is that most builders need to borrow money from the bank for a project. But the government red tape can take from 1-3 years. Plus the building phase can be 1-2 years. So a total of 2-5 years. Builders cannot property plan project schedule, finance schedule and are feeling excessive risk…

Lisbon has been full of skycranes ever since I got here (some 7 years ago). Porto has even more! There has been a huge amount of renovation and development, but yes I dare say there could be more without red tape. Apparently one issue with Portugal is that inheritance is split between children, so properties end up with multiple owners who cannot agree on sale etc.

Tourism has been a big driver of renovation (it is hard to argue with 100+euro/person/night yield), but of course that has necessitated evicting students and other 'itinerant' residents. Hence the recent protests.

Re: As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

#68

Post by somewhereoutth »

quonn wrote: post #59

It‘s interesting how polarizing this thread is. The fact is that the portuguese state does not have the resources to create enough housing in Lisbon without foreign investment. The Portuguese will realize this when they have removed all measures that made cash flow in in the first place.

I currently live in the Lisbon suburbs. Quite frankly from a UK perspective they are a modern miracle - vast areas of medium density housing with shops, schools, cafes, metro, etc, etc within walking distance (actually stone throwing distance).

They were built in the 80s/90s, I'm not sure of the funding, but I doubt it was foreign investment (perhaps the EU? Portugal government?).

The reason why there is not enough housing in central Lisbon/Porto is because much of it was turned over to short term lets like AirBnB. This has resulted in much needed renovation (privately funded), but has also resulted in entire neighborhoods being eviscerated of local/long term residents.

Re: As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

#69

Post by somewhereoutth »

seydor wrote: post #7

The older a society is, the more boomers get their way, and that's where the root of the whole southern europe misery lies. Young people are trapped in the country and the best option objectively is to leave. (Or to somehow undemocratically lower taxes and make the country competitive) Are there really so many digital nomads in Portugal that they raise prices? Airbnb is certainly a factor (although a lot of airbnb in…

Golden visas will only push up the top end of the market. They won't affect the 100-200k valued properties that (reasonably well off) Portuguese people might be going for.

And it is easy enough to build some concrete boxes with a nice view a long way from anywhere that a Portuguese person or family might want to actually live, and turn it over to a golden visa seeker for that cool half mil euro (or whatever it is). I can point them out to you the next time you come by!

Re: As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

#70

Post by somewhereoutth »

jmyeet wrote: post #8

Expats can be helpful to a country like Portugal but it has to be done correctly. And of course it hasn't. What Portugal needs to do is: 1. Ban Airbnb and other short-term housing other than renting out a room in your house ; 2. Provide a huge stock of social housing, meaning housing at an affordable price only available to natives; and 3. Restrict foreign ownership of huge swathes of the country. This could be as si…

Agree with 1. Ban AirBnB. (this is already in play as I understand it)

Silly tax incentives like Non-Habitual Residency have to go (done).

2. Actually already exists in the suburbs, but maybe now needs a bit of a make over. Of course the children of well-heeled Portuguese wouldn't stoop to live in such places while studying at University, but hey that's the world we live in!

3. The Golden Visa scheme is a nonsense (I think this is also being scrapped), but perhaps property taxes for places that are not the primary home might help with this.

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