Portugal joins the measures taken by Italy, France and Spain when it comes to mortgage

March 18, 2020
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The Government of Portugal has recently approved a package of measures to help SMEs and the self-employed especially vulnerable to liquidity crisis situations and has confirmed that it is preparing a mortgage moratorium.

As published by idealista / news Portugal, some 600 million euros of this liquidity line will go to the restaurant and hospitality sector, while the tourism sector, which includes travel agencies, entertainment and events organization, will receive 200 million euros.

The tourist developments, meanwhile, will have a support of 900 million euros, and the industry (textiles, footwear and extractive industries) will receive another 1,300 million euros.

Most of those amounts will be available to micro and small businesses.

This liquidity support will be available to Portuguese companies in the coming days, and includes a grace period until the end of the year and the possibility of repaying the loan in a term of up to four years.

On the other hand, the Government led by Antonio Costa has decided to make the payment of taxes and social contributions to companies and the self-employed more flexible. In the case of companies that bill up to 10 million euros, the payment of taxes can be made in different installments (the first three months without interest), while companies with a maximum of 50 employees on staff can postpone part payment of social contributions from April. Some measures that the self-employed who see their activity reduced by at least 20% due to the impact of the Coronavirus will also benefit. And the average billing in the three months prior to the period for which the tax flexibility is requested will be taken into account.

There will be a moratorium on mortgages

As Spain and Italy have already done, Portugal prepares a moratorium on mortgage payments. The Portuguese Finance Manager, according to idealista / news Portugal, said: 

"The decisions of the banking authorities, last week, allow the responsibilities of the banking system to adjust to the current situation. The work of constituting a moratorium on capital and mortgage interest, in a job that is being developing between the Banco de Portugal (BdP) and the banking system (Associação Portuguesa de Bancos -APB-) and which is being monitored by the Government."

Details of the measure are expected to be known by the end of the month, although everything indicates that they will be reserved for vulnerable people. In Spain and Italy, for example, it will only benefit workers who have lost their jobs or the self-employed who have seen their income drastically reduced by the extraordinary measures that have been taken to deal with the virus. Some banks such as BPI and Novo Banco would already be working on the implementation of their own mechanism that allows these temporary defaults on mortgages. 

March 18, 2020

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