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On June 9^th 2010, the Portuguese Parliament approved the government's austerity measures package, the aim of which is to expedite a reduction in Portugal's budget deficit to 7.3 percent of GDP in 2010 and 4.6 percent in 2011, down from 9.4 percent in 2009. Here, House Sales Portugal (http://www.housesalesportugal.com) looks at what effect if any these austerity measures will have on property sales in Portugal .

The plan to reduce Portugal's budget deficit was announced by the government on May 13th, and is just one of many similar austerity measures packages being devised across the euro zone. On June 9th, the final vote of Portugal's parliament saw this package approved. In order to cut the country's deficit to 4.6% by 2011, there will be five per cent pay cuts for public sector staff and politicians and increases in VAT sales tax, income tax and profits tax up to 2.5 percent, announced Prime Minister Jose Socrates and opposition leader Pedro Passos Coelho. Portugal's Treasury chief declined the opportunity to draw on the euro zone aid package, citing a successful bond sale and a strong economic recovery in Q1 of 2010.

The increase in VAT sales, income tax and profits tax are the measures which may tangibly affect property in Portugal . While these new austerity measures are in place, anyone wanting to buy property in Portugal will be required to pay more VAT sales tax on the property; those who sell property in Portugal will have to pay more profits tax on any profit made from the sale of the property; and anyone owning buy to let property in Portugal and receiving letting income will be hit by the higher income tax level. However, the hike in these taxes is not significant, and much of the 2 billion euros the government aims to save in 2010 will be achieved by public sector wage cuts; the Portuguese government is keen to keep its property market buoyant.

If you would like further information on the real estate market in Portugal, visit http://www.housesalesportugal.com