Market Prices?

Under the Portuguese government's residential housing rescue plan, the government sponsored property fund will buy your house and rent it back to you if you can't meet the bank's instalments.

Sounds like a reasonable measure, until you ask what the price of the house will be. "Market price" Of course the existence of a market price depends on there being a functioning market, which there isn't! So written valuations must be obtained from two Stock Exchange approved valuers. But even that doesn't get around the problem, as the valuers' comparative valuation basis must be "market price".

While they will be in huge demand, they will probably continue to be badly paid by the banks for their expertise. I'm glad I'm not in their shoes. Actually I am a valuer, but I'm not risking registering and assuming that responsibility for the pitiful fees that banks have paid in the past. It's a sad reflection on the risks of doing business, don't you think?

There is a twist in the tail though. Property tax (IMI) is payable based on the tax department's formula-based valuation of your property. So surely, either the fund should buy your house for that valuation, or the tax office should re-base the valuation formula (downwards) to reflect the new reality of market prices, for there to be fiscal justice!