Starting with the main area of conflict, and my simple opinion, followed by a deeper analysis by AI.
Housing and accommodation availability and pricing. A general issue in Portugal, but a more serious and very valid concern in Madeira, due to the acute shortage of existing housing stock and the constraints of building on a mountainous island with limited building capacity.
Both purchasing pricing and rental costs have escalated hugely over the last 10 years. Combined with the generally low incomes of the Madeiran population, the situation is very complicated. The rental situation is not identical to that of purchasing, but here I will concentrate on the latter.
But why are immigrants held soley responsible for this situation?
House selling prices are generally determined between a real estate agent and the owner (or seller) of the property. That value is determined and set, knowing that prices have been escalating exponentially in recent years, and that demand far outstrips supply. Knowing that selling to an immigrant will be more lucrative surely comes into the discussion, especially knowing that foreign buyers are out there waiting for opportunities to arise.
It is true that generally the purchasing power of an immigrant is higher than that of a local, but not always the case. In most rural areas, or indeed anywhere outside of the Funchal costal strip and broader city centre, selling prices are lower.
So who can be blamed? The seller who wants the highest price possible, the selling agent (although it was not common to use selling agents 10 years ago) who wants the maximum selling commission possible and a good reputation, or the buyer who has the financial means to pay the asking price?
All of them? None of them? Or both? Or someone else?
New builds are in the highest growth period ever, and many of these are luxury builds in prime locations, often with prices exceeding 1 million Euros. The top limiting factor in this luxury market is construction manpower, and that is ever increasing in numbers through immigration, as the local skilled manpower is just not sufficient.
Should there be a social obligation on these luxury builds, to subsidise more accessible housing? Some sort of luxury tax, or affordable building commitment.
Another factor that has taken many properties off the housing market, is the considerable growth of Alojamento Local (short term letting, mainly for tourism). The licenses are controlled locally, and there is little evidence of councils refusing applications in areas where housing shortages are particularly acute.
Or should the government be blamed for creating the current housing crisis without fully considering the impacts on Madeira and the economy. The truth is that we have a Regional Government that is truly backpedaling to deal with this situation. A government that lacks foresight, ideas, vision, and innovation and barely even recognises the problem that exists with rising immigration and the housing market.
Yes, new affordable housing is being built by the Regional Government, but a the rate of just a few hundred units a year. Nothing like that what is needed by the local population. Just a thought … is there anything stopping immigrants buying these properties?
The Regional Government has a huge portfolio of ‘património’. Thousands of government owned items of all descriptions, including land and buildings. Unoccupied schools or health centres may be among these assets, for example.
Land and buildings unoccupied, that could be used to provide some relief in the housing market with relatively small investments. The limitations of some these could be overcome with self build or conversion schemes and local authority cooperation.
Then there is the concept of prefabricated homes. Imported, but still much cheaper than building, with a lead time of just a few months from order to construction.
Then there is the probable biggest source of empty housing in Madeira. Houses empty and abandoned, originally belonging to Madeirans that have emigrated or died, and with complex issues of inheritance due to Portuguese law. This would be the greatest instant source of housing, but the legal issues are very complex and difficult to resolve.
Some tax concessions have already been made to help buyers, but this could go much further with a political push.
Then banking and financing could play a part with schemes for joint ownership between friends, or shared ownership (part purchase, part rent).
Believe me, there are multiple options yet to be discussed to alleviate the housing crisis for both ownership and rental markets.
Now AI can share it’s far more complex opinion on the subject:
Q1. The island of Madeira is in a deep housing crisis with a huge shortage of options for either rental or purchase. The Madeirans blame soley immigrants for the problem. How do you analyse this situation?
A1: The housing crisis in Madeira is a complex issue with multiple contributing factors, and while immigration plays a role, attributing the problem solely to immigrants is an oversimplification and likely inaccurate. Here’s a breakdown of the situation:
Factors Contributing to Madeira’s Housing Crisis:
* Supply and Demand Imbalance:
* Limited Supply: There’s a significant shortage of available housing for both rent and purchase. This is partly due to a lack of new construction, insufficient skilled workers, and rising costs of building materials and labor. Bureaucracy and legal uncertainty can also hinder construction.
* Increased Demand:
* Tourism and Short-Term Rentals (Alojamento Local): Madeira is a year-round tourist destination, and many properties are converted to short-term tourist accommodation due to the higher returns compared to long-term rentals. This significantly reduces the housing stock available for local residents.
* Foreign Investment and Residency Schemes: Programs like the Golden Visa (though recently curtailed) and the Non-Habitual Residency (NHR) scheme (which offers tax benefits) attracted foreign buyers and investors, including digital nomads, who often have higher purchasing power. This increased demand for mid-to-high-end properties, pushing prices up across the board.
* Remote Workers (Digital Nomads): The rise of remote work has made Madeira an attractive location for digital nomads seeking a mild climate and good quality of life. While many are drawn by the “lower cost of living” compared to major Western cities, their presence can still drive up prices for locals.
* Population Growth: While overall population growth in Madeira has been modest, the foreign resident population has seen a significant increase, representing a growing proportion of the total population.
* Speculation and Price Inflation:
* Developer and Real Estate Agency Practices: Some analyses suggest that developers and real estate agencies capitalize on the housing shortage to increase their margins, leading to speculative inflation where prices are raised simply because buyers are desperate.
* Property Overvaluation: There are indicators of a property bubble, with house prices significantly higher than rents and household incomes, suggesting properties are being overvalued.
* Government Policies and Regulations:
* Rent Subsidies: While intended to help, some argue that policies focusing solely on rent subsidies without increasing supply can inadvertently push prices up by increasing purchasing power without addressing the fundamental imbalance.
* Lack of Rigidity in Housing Supply: The market has been criticized for not responding adequately to the growing demand.
* Taxation and Legal Uncertainty for Property Owners: Some property owners may be hesitant to rent out properties due to high taxes, legal uncertainties, and restrictions, further reducing the rental supply.
The Role of Immigrants (and how it’s often misinterpreted):
While it’s true that the influx of foreign residents, including digital nomads and those utilizing residency schemes, has contributed to increased demand, it’s crucial to understand the nuance:
* Increased Demand, Not Sole Cause: Immigrants are part of the increased demand, but they are not the sole or even necessarily the primary cause of the crisis. The underlying issues of limited supply, speculation, and the attractive nature of short-term rentals are fundamental.
* Purchasing Power Discrepancy: Foreign buyers often have higher disposable incomes or are looking for investment opportunities, which can outcompete local Madeirans for available properties. This creates a perception that immigrants are “taking” housing from locals.
* Perception vs. Reality: It’s easier to blame an external group (immigrants) for a complex problem than to acknowledge systemic issues within the housing market, government policies, and economic shifts. This can lead to resentment and xenophobia.
* Varied Impact: The impact of different types of immigrants varies. High-net-worth investors have a different effect on the luxury market than, for example, those seeking jobs in sectors with labor shortages.
Government Response:
The Madeiran government is aware of the crisis and has announced measures to address it, including:
* “Casa Própria” Programme: Building new properties at prices 30% below market value.
* Acquisition of Homes: Investing €128 million to acquire 805 affordable rental homes by 2026.
* Public Tenders for New Developments: Opening tenders for new housing developments to attract private developers and cooperatives.
* “Prahabitar Arrendamento” Program: Providing financial aid and rent support to eligible families.
* Support for Self-Built Homes: Launching a program to allocate construction-ready plots for residents to build their own homes.
Conclusion:
The Madeiran housing crisis is a multifaceted problem stemming from a significant imbalance between a limited supply of housing and rapidly increasing demand. While the arrival of immigrants, digital nomads, and foreign investors has undoubtedly contributed to the surge in demand and prices, it’s a symptom of a larger issue, not the sole cause. Blaming immigrants entirely ignores the critical roles of inadequate construction, speculative practices, the lucrative short-term rental market, and potentially insufficient or misdirected housing policies. A comprehensive solution requires addressing all these contributing factors, rather than focusing on a single scapegoat.
Q2: So if a plan to recover this desperate situation were to be developed. What would it be, and would be the key roles of the following parties. 1. Owner sellers 2. Real estate agencies 3. Potential buyers 4. Property developers 5. National Government 6.Regional Government 7. Local government (councils) 8. The authorities for finance and taxation.
A2: Developing a comprehensive plan to address Madeira’s desperate housing situation requires a multi-pronged approach, focusing on increasing supply, regulating demand, ensuring affordability, and fostering transparency. Crucially, it demands significant coordination and a shared commitment from all stakeholders.
Here’s a possible plan with the key roles of each party:
A Comprehensive Plan for Sustainable Housing in Madeira
I. Overarching Vision: To create a sustainable, equitable, and accessible housing market in Madeira that prioritizes the needs of its long-term residents, while still welcoming visitors and responsible investment.
II. Core Pillars of the Plan:
* Accelerate and Diversify Housing Supply: Increase the number of available homes, particularly affordable and long-term rental options.
* Balance & Regulate Demand: Manage the impact of tourism and foreign investment on the residential housing stock.
* Ensure Affordability & Social Housing: Implement mechanisms to make housing accessible to Madeiran families, especially those with lower and middle incomes.
* Combat Speculation & Foster Transparency: Create a fairer market where housing is primarily for living, not just for financial speculation.
* Streamline Bureaucracy & Incentivize Desired Behavior: Remove obstacles to construction and encourage responsible property ownership and rental.
III. Key Roles and Actions of Each Party:
1. Owner-Sellers (Individual & Corporate Property Owners)
* Role: To contribute to the long-term rental market, maintain properties, and engage in fair transactions.
* Actions:
* Prioritize Long-Term Rentals: Be incentivized (via tax breaks, reduced bureaucracy) to convert short-term tourist accommodation (Alojamento Local – AL) back into long-term residential rentals.
* Fair Pricing: Resist speculative pricing and align asking prices with realistic market valuations that consider local purchasing power.
* Property Maintenance: Ensure properties are well-maintained and meet minimum habitability standards for long-term tenants.
* Transparency: Provide accurate information about the property’s condition, energy efficiency, and legal status.
* Vacant Property Activation: Bring long-term vacant properties (not under active construction) back into the rental or sale market.
2. Real Estate Agencies
* Role: To facilitate transparent and ethical transactions, providing accurate market information and promoting fair pricing.
* Actions:
* Ethical Pricing: Discourage and actively advise against speculative overpricing. Agencies should promote fair market valuations.
* Market Transparency: Provide clear, accurate, and up-to-date market data to both sellers and buyers, including average prices per square meter in different areas.
* Promote Local Initiatives: Inform potential buyers/renters about government affordable housing programs and incentives.
* Discourage “Buy-to-Leave”: Actively discourage practices that lead to properties sitting empty for extended periods.
* Professional Conduct: Adhere to strict ethical codes, avoiding conflicts of interest and predatory practices.
3. Potential Buyers (Especially Local Madeirans)
* Role: To make informed decisions, utilize available support programs, and collectively advocate for fair market practices.
* Actions:
* Informed Decisions: Research market conditions thoroughly and understand the various government support programs available (subsidies, controlled interest rates).
* Utilize Support: Actively apply for and utilize affordable housing schemes, public housing programs, and mortgage assistance where eligible.
* Community Advocacy: Support local initiatives and policies aimed at creating more affordable housing and regulating the market.
* Avoid Panic Buying: Resist the urge to buy at inflated prices due to fear of missing out, which further fuels the price spiral.
* Explore Alternatives: Consider co-housing models, co-operatives, or self-build options if they become available and supported.
4. Property Developers
* Role: To significantly increase the supply of diverse housing types, with a strong focus on affordability and sustainability, while innovating construction processes.
* Actions:
* Accelerate Construction: Implement efficient building techniques to shorten construction times.
* Prioritize Affordable Housing: Dedicate a significant percentage of new developments (e.g., 20-30%) to affordable or social housing units, potentially in exchange for tax incentives or streamlined permits.
* Diversify Housing Types: Build a range of housing types, including smaller units, family apartments, and modular homes to cater to different income levels and needs.
* Sustainable Building: Incorporate eco-friendly materials and energy-efficient designs.
* Brownfield Development: Focus on rehabilitating existing dilapidated buildings or developing on previously used land to limit urban sprawl.
* Public-Private Partnerships: Actively seek partnerships with regional and local governments for large-scale affordable housing projects.
5. National Government (Republic of Portugal)
* Role: To establish overarching national policies, legal frameworks, and financial regulations that support housing affordability and curb speculation across the country, including Madeira.
* Actions:
* Review/Reform Residency Schemes: Further review and adjust schemes like the NHR (Non-Habitual Resident) status, potentially linking tax benefits to specific job creation or investment outside the housing market, or phasing out its housing-related aspects.
* National Housing Law: Enact or strengthen national laws that provide a robust framework for housing rights, rent controls (if deemed appropriate and workable for specific market segments), and measures against speculation.
* Financial Market Regulation: Collaborate with the banking sector to ensure responsible lending practices and prevent housing bubbles.
* Broad Fiscal Policy: Implement national tax policies that disincentivize holding vacant properties or excessive real estate speculation (e.g., higher capital gains tax on short-term property flips).
* Centralized Data: Develop a national, comprehensive, and publicly accessible database for property sales, rentals, and vacant properties.
6. Regional Government (Governo Regional da Madeira)
* Role: To develop and implement Madeira-specific housing strategies, manage regional land use, regulate tourism accommodation, and invest in essential infrastructure.
* Actions:
* Regional Housing Master Plan: Create a detailed, long-term housing plan for Madeira, identifying areas for new construction, social housing, and urban rehabilitation.
* Strict AL Regulation: Implement and rigorously enforce stricter regulations on Alojamento Local (AL), including:
* Caps: Limit the number of AL licenses in certain high-demand residential zones.
* Zoning Restrictions: Prohibit new AL licenses in designated “housing priority zones.”
* Increased Fees/Taxes: Levy higher annual fees or municipal tourist taxes on AL properties to disincentivize their proliferation and fund affordable housing initiatives.
* Enforcement: Strengthen inspection and enforcement to identify and fine illegal ALs.
* Public Housing Investment: Direct significant regional funds towards building and acquiring properties for public rental housing, social housing, and rent-controlled schemes.
* Land Bank: Create a regional land bank to acquire strategic plots for affordable housing development.
* Infrastructure Investment: Ensure that new housing developments are supported by adequate infrastructure (roads, utilities, public transport, schools, healthcare).
* Promote Diversification: Encourage economic diversification beyond tourism to reduce pressure on the housing market from purely tourist-driven demand.
7. Local Government (Câmaras Municipais – Municipal Councils)
* Role: To implement planning and zoning regulations, streamline local permitting processes, identify and activate vacant properties, and provide direct local support for residents.
* Actions:
* Streamline Permitting: Drastically reduce bureaucratic delays in approving construction permits for residential projects, especially for affordable housing. Implement digital systems for faster processing.
* Municipal Zoning: Adjust local zoning laws to allow for higher density residential development in appropriate areas and restrict new AL licenses in residential zones where housing is scarce.
* Identify & Activate Vacant Properties: Conduct a comprehensive census of vacant properties within the municipality and implement escalating taxes or compulsory rental/sale orders for long-term vacant properties.
* Municipal Housing Programs: Develop and manage local social housing projects, rent support programs, and initiatives to rehabilitate old buildings for affordable housing.
* Community Engagement: Engage with local communities to understand their housing needs and ensure that new developments meet local requirements.
* Support for Small Owners: Provide technical and financial support for small property owners to renovate properties for long-term rental.
8. The Authorities for Finance and Taxation (e.g., Ministry of Finance, Tax Authority, Bank of Portugal)
* Role: To design and implement fiscal policies that encourage long-term rentals and discourage speculation, while ensuring fair access to finance for homebuyers.
* Actions:
* Differential Taxation:
* Tax Incentives for Long-Term Rentals: Offer significant tax breaks (e.g., lower IRS rates on rental income, reduced IMI – municipal property tax) for owners who commit to long-term residential rentals.
* Increased AL Taxation: Increase taxes on Alojamento Local income and/or property taxes for properties used exclusively for short-term rentals, especially if they are not the owner’s primary residence.
* Vacant Property Tax: Implement a progressive municipal property tax (IMI) on long-term vacant residential properties.
* Speculation Tax: Consider a higher capital gains tax on properties sold within a short period (e.g., 1-3 years) of purchase, especially if they were not the primary residence.
* Mortgage Market Regulation: Ensure that banks maintain responsible lending criteria, preventing excessive debt accumulation while still allowing access to mortgages for qualified local buyers. Explore possibilities for state-backed guarantees or lower interest rates for first-time Madeiran homebuyers.
* Combat Tax Evasion: Strengthen enforcement mechanisms to ensure that all rental income, particularly from AL, is declared and taxed appropriately.
* Data Sharing: Collaborate with other government levels to share financial and property data to identify market trends, speculation, and compliance issues.
IV. Implementation & Monitoring:
* Inter-Governmental Task Force: Establish a permanent task force with representatives from National, Regional, and Local Governments, as well as finance/tax authorities, to ensure continuous coordination and problem-solving.
* Data-Driven Decisions: Implement robust data collection and analysis to monitor market trends, measure the effectiveness of policies, and make necessary adjustments.
* Public Awareness Campaign: Educate the Madeiran population about the complexities of the housing crisis and the solutions being implemented, fostering understanding and reducing blame.
* Timeline with Milestones: Set clear, measurable goals and timelines for each action, with regular reviews and public reporting on progress.
This plan requires significant political will and a commitment to prioritize the housing needs of Madeiran residents over speculative gains or unchecked tourism growth. It’s a long-term endeavor but essential for the social and economic well-being of the island.
Q3: Does this plan address all the needs for a resolution of the crisis, or are there other parties that could make a notable difference? Does the plan take into account the factors that Madeira is a mountainous island with scarce building land, its lack of skilled resources locally, and its insularity with higher costs as a result?
Your critique is excellent and points to crucial limitations in the previous plan. While comprehensive in its initial scope, it did indeed miss some significant factors and potential factors unique to Madeira’s situation.
Here’s an analysis of what might still be missing and other parties that could make a notable difference, taking into account the specific challenges of Madeira:
Missing Factors and Unaddressed Needs:
* Scarce Building Land (Mountainous Terrain & Coastline Protection):
* The plan implicitly touches on this by mentioning “brownfield development” and “land bank,” but it doesn’t explicitly highlight the extreme constraint of land availability. This isn’t just about finding plots; it’s about the engineering challenges and costs of building on steep terrain, the need for extensive retaining walls, and the environmental sensitivity of remaining green areas.
* Unaddressed Need: Strategies specifically for optimizing land use on a mountainous island, including vertical expansion where appropriate, innovative foundational engineering, and a clear mapping of developable vs. protected areas.
* Lack of Skilled Resources (Local Labor Shortage):
* The plan doesn’t directly address the shortage of skilled construction workers (carpenters, electricians, plumbers, masons, engineers capable of complex hillside construction). This directly impacts the speed and cost of building. Even if permits are streamlined, if there aren’t enough qualified hands, construction won’t accelerate.
* Unaddressed Need: Concrete strategies for training and retaining local skilled labor, or managing the responsible import of skilled labor.
* Insularity and Higher Costs:
* Madeira’s island status means higher costs for importing building materials due to shipping and logistics. This significantly inflates construction costs, making affordable housing harder to achieve even with subsidies.
* Unaddressed Need: Strategies to mitigate import costs, explore local material sourcing where possible, or specific financial incentives to offset these higher material costs for affordable housing projects.
* Energy Costs and Sustainability in Construction:
* Related to insularity, energy costs are higher. The plan mentions “sustainable building,” but given the climate and high energy costs, specific emphasis on energy efficiency in new builds and renovations is crucial to reduce long-term living costs for residents.
* Long-Term Economic Diversification (Beyond Tourism/Real Estate):
* While the plan mentions “diversify economy” under the Regional Government, it’s a critical underlying factor. An economy overly reliant on tourism and foreign real estate investment will always put immense pressure on housing.
* Unaddressed Need: A more robust strategy for creating well-paying local jobs in other sectors that allow Madeirans to afford higher housing costs, or to shift the economic focus away from purely high-value foreign influx.
* Socio-Cultural Acceptance of New Housing Models:
* The plan touches on “alternative housing models,” but there might be cultural resistance to higher-density living, smaller apartments, or co-living spaces, which are often necessary in land-scarce environments.
* Unaddressed Need: Public education and engagement campaigns to foster acceptance of diverse and potentially more compact housing solutions.
Other Parties That Could Make a Notable Difference:
* Educational Institutions (Universities, Vocational Schools):
* Role: Address the skilled labor shortage and promote innovative construction techniques.
* Actions:
* Develop specialized vocational training programs for construction trades, particularly those relevant to complex hillside building.
* Collaborate with developers to create apprenticeship programs.
* Offer degrees in urban planning, sustainable architecture, and civil engineering adapted to island environments.
* Research and develop solutions for local material sourcing and cost-effective, sustainable construction methods.
* Local Building Material Suppliers and Logistics Companies:
* Role: Contribute to cost reduction and supply chain efficiency.
* Actions:
* Work with developers and government to optimize bulk purchasing and delivery of materials.
* Explore opportunities for local production of certain building components if feasible (e.g., pre-fabricated elements, aggregates).
* Negotiate better shipping rates with carriers or explore consolidated cargo options.
* Local Communities and Residents’ Associations:
* Role: Provide essential ground-level input, ensure social acceptance of new developments, and act as watchdogs.
* Actions:
* Actively participate in public consultations for new housing projects and zoning changes.
* Identify specific local needs and challenges related to housing.
* Monitor compliance with AL regulations and report violations.
* Advocate for specific community-led housing initiatives.
* Foster a sense of community responsibility for sustainable development.
* Banks and Financial Institutions (Beyond Central Authority):
* Role: Directly influence mortgage accessibility and terms.
* Actions:
* Develop specific mortgage products tailored for Madeiran residents, potentially with lower down payment requirements or more flexible terms for affordable housing.
* Collaborate with government subsidy programs to streamline financing for qualifying buyers.
* Offer attractive financing for developers committed to affordable housing projects.
* Implement stricter internal policies on lending for speculative purchases or properties that are likely to remain vacant.
* Tourism Industry Associations & Major Operators:
* Role: Acknowledge their impact on the housing market and contribute to solutions.
* Actions:
* Support initiatives that balance tourism growth with residential housing needs.
* Discourage the aggressive conversion of residential properties to AL.
* Potentially contribute to a fund for affordable housing from tourism revenues.
* Explore staff housing solutions for their employees to alleviate pressure on the general rental market.
* International Organizations and NGOs (e.g., focused on sustainable development, housing rights):
* Role: Provide expertise, funding, and independent oversight.
* Actions:
* Offer technical assistance and best practices from other island or land-constrained regions facing similar housing crises.
* Potentially provide grants or low-interest loans for sustainable and affordable housing projects.
* Conduct independent assessments of the housing market and policy effectiveness.
By incorporating these additional parties and addressing the unique geographical, logistical, and socio-economic challenges of Madeira more explicitly, the plan would become even more robust and realistic for achieving a resolution to the housing crisis.
Q4: The probable biggest source of empty housing in Madeira are houses empty and abandoned, originally belonging to Madeirans that have emigrated or died, and with complex issues of inheritance due to Portuguese law. This would be the greatest instant source of housing, but the legal issues are very complex and difficult to resolve.
A4: You have hit upon one of the most critical and potentially transformative, yet incredibly challenging, aspects of Madeira’s housing crisis: the vast number of empty, abandoned properties tied up in complex inheritance issues. This is indeed a huge untapped resource.
My previous plan did mention “identifying and activating vacant properties,” but it did not adequately address the specific, deep-seated legal and bureaucratic hurdles associated with these particular types of properties. Let’s delve into why this is so complex and how a refined plan could tackle it.
The Elephant in the Room: Inherited Abandoned Properties
Why it’s so complex (Portuguese Law & Emigration Impact):
* “Forced Heirship” (Herança Legitimária): Portuguese law dictates that a fixed portion of a deceased person’s estate (a significant percentage, often 50-60%) must go to direct heirs (spouse, children, parents). This means even if a will exists, it can’t entirely disinherit these relatives.
* Multiple Heirs: Large families, especially from past generations where people often had many children, mean a single property can have dozens, even hundreds, of co-owners across generations. All typically need to agree on what to do with the property.
* Heirs Abroad (Emigration): A huge number of Madeirans emigrated over the decades, particularly to the Americas, Europe, and South Africa. Many descendants of the original owners are now living abroad, often with little connection to Madeira, sometimes unaware they even have a claim, or simply unwilling to engage in the bureaucratic process from afar.
* Unknown Heirs/Lack of Wills: If a person dies without a will (intestate), the law dictates the order of succession. Tracing these heirs, especially distant ones or those who emigrated and lost touch, can be a monumental task, involving extensive genealogical research.
* Bureaucratic Inertia & Cost: The legal process of inheritance in Portugal (habilitation of heirs, asset registration, division) can be slow, complex, and costly, involving notaries, lawyers, and multiple registries. Many heirs simply don’t have the time, money, or knowledge to pursue it.
* “Undivided Inheritance” (Herança Indivisa): Until an estate is formally settled and divided among heirs, it exists as an “undivided inheritance.” This means no single heir can unilaterally sell or act on the property.
* Taxation & Debts: Inherited properties can come with outstanding debts (e.g., municipal property tax – IMI) or require payment of stamp duty upon transfer of ownership. If heirs don’t want to pay these, the property remains in limbo.
* Physical Deterioration: Many of these properties have been empty for decades, falling into severe disrepair, making renovation very expensive, sometimes exceeding the value of the property itself.
How to Address This in a Refined Plan:
This specific issue needs a dedicated, multi-faceted approach, integrated into the roles of existing and potentially new parties.
1. Legal Reform & Streamlining (National & Regional Government, Authorities for Finance/Taxation):
* Simplified “Habilitação de Herdeiros” Process: Create a vastly simplified, fast-track, and low-cost legal procedure for cases involving long-abandoned properties with multiple or unknown heirs, especially where property value is low.
* “Presumption of Abandonment” Law: Introduce a legal mechanism where, after a specified period of verifiable abandonment (e.g., 10-15 years with no tax payments, no utility usage, no known heirs or contact attempts), the property can be legally presumed abandoned.
* Facilitated State Acquisition: Streamline the process for the State (or municipality) to acquire truly abandoned properties where no heirs can be found or identified after diligent public notice and investigation. The current law allows for the State to inherit if no other heirs are found, but the process is slow.
* Digitalization of Records: Invest heavily in digitalizing land registry, cadastre, and civil registry records to make tracing property ownership and inheritance lines faster and more accurate.
* Tax Incentives for Resolution: Offer significant tax breaks (e.g., reduced stamp duty, IMI exemptions for a period) for heirs who do come forward and formalize their inheritance, committing to selling or renting the property within a set timeframe.
* Disincentives for Inaction: Implement escalating vacant property taxes (IMI) that apply aggressively to documented inherited properties where heirs exist but refuse to act, to pressure them into resolving the situation.
2. Specialized Government Units & Resources (Regional & Local Government):
* “Inheritance Resolution Task Force”: Create a dedicated multi-disciplinary task force at the regional or municipal level, comprising legal experts, genealogists, social workers (for outreach), and land registry officials.
* Proactive Heir Tracing: This task force would actively research and attempt to locate heirs of abandoned properties, including using international networks and diplomatic channels if necessary.
* Public Information Campaigns: Launch targeted campaigns (including in diaspora communities) to inform potential heirs about the legal processes, potential tax benefits, and available support to resolve inheritance issues.
* Mediation Services: Offer free or low-cost mediation services for co-heirs who are struggling to agree on the future of a property.
* “Municipal Property Rehabilitation Funds”: Establish municipal funds to acquire these properties (via facilitated acquisition or compulsory purchase for public interest), rehabilitate them, and then make them available as affordable housing. The cost of rehabilitation can be recovered through subsequent affordable rental or sale.
3. New / Emphasized Roles:
* Legal Professionals (Lawyers, Notaries):
* Role: Facilitate complex inheritance proceedings, advise heirs, and expedite property formalization.
* Actions: Offer pro-bono or subsidized legal aid clinics for low-income individuals facing inheritance challenges. Develop expertise in international inheritance law relevant to the Madeiran diaspora.
* Genealogists:
* Role: Crucial for tracing distant or unknown heirs of abandoned properties.
* Actions: Collaborate directly with the “Inheritance Resolution Task Force” to undertake professional genealogical research.
* Madeiran Diaspora Organizations:
* Role: Serve as a bridge to connect with potential heirs living abroad, disseminate information, and potentially facilitate communication.
* Actions: Partner with regional and local governments to share information on inheritance resolution programs and connect with individuals in their communities who might have claims to Madeiran properties.
* International Consulates/Embassies (Portuguese & Foreign):
* Role: Assist in locating and communicating with heirs abroad.
* Actions: Provide contact information for heirs (within privacy laws), verify documents, and facilitate legal processes for citizens residing in their respective countries.
Integration into the Broader Plan:
* This strategy directly feeds into the “Increase Supply & Accelerate Construction” pillar by unlocking existing housing stock.
* It supports “Promote Affordability & Social Housing” if the rehabilitated properties are then channeled into affordable housing programs.
* It directly addresses “Combat Speculation & Foster Transparency” by bringing dormant assets back into productive use and formalizing ownership.
* It requires significant action from National, Regional, and Local Governments in terms of legal reform, resource allocation, and direct intervention.
* It leverages Authorities for Finance and Taxation for critical incentives and disincentives.
While resolving these complex inheritance issues is not a quick fix, it holds the potential to be the single largest source of readily available housing stock in Madeira. It requires sustained political will, significant investment in legal and administrative resources, and a patient, empathetic approach to the human stories behind these abandoned homes.
Healing Madeira 