Portugal Golden Visa financial implications of socialist governance

A wealth tax on all Portuguese citizens would be radioactive.

Argentina is a lovely country, but I want nothing to do with any wealth tax. California has nice mountains and fine scenery, but their proposal to impose a retroactive wealth tax–enduring for 10 years after the last visit–on anyone who visits the state (for 60+ days in a year) means that I will continue to blacklist that state from my travel plans as a precaution.

Portugal does not exactly have a general wealth tax, but wealth property tax.

Property wealth tax

First introduced back in 2017, the Adicional Imposto Municipal Sobre Imóveis (AIMI) affects owners with a share in Portuguese property worth over €600,000. If you and your partner jointly own the property, you only pay AIMI if the value is over €1.2 million.

Regardless of residency status, the rates applied are 0.4% on the total amount for properties held by companies, 0.7% for individuals, and 1% for those owning property valued over €1 million. Data from the Portuguese government shows that nearly 89,000 homeowners paid AIMI in 2020.

Good point.

A property tax is fine. Portugal’s AIMI is reasonable, the rate is typical, and the compliance burden is negligible. Paying taxes is fine, though I prefer to see them used for the public good.

I would not like a wealth tax that applied to all of my worldwide assets. Valuing intangible and illiquid assets is a well documented challenge. Most European countries eliminated wealth taxes because they were impractical. It would mean endless bureaucratic hassles and limitless invasion of privacy.

I spend several whole days every year complying with burdensome tax paperwork; I want less of that misery in life, not more. My country has the most intrusive and cumbersome taxation laws and reporting requirements in the world, with no close competitors. My former home state of California had its own completely separate tax system, based on the pre-2017 federal tax laws, that required endless additional hours of suffering and confusion. Send me a reasonable tax bill and I’ll pay it, but I don’t want to spend 10% of my potential free time for the rest of my life doing agonizing tax paperwork.

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