Stamp Tax on Construction Land Under Verba 28.1 TGIS – CAAD Arbitration 391/2016-T

ARBITRAL DECISION

I. REPORT

A…, S.A., taxpayer no. …, with registered office at Avenue …, no. …, … left, …-…, Lisbon, hereinafter referred to as Applicant, filed a petition for establishment of a sole Arbitral Tribunal, under the combined provisions of articles 2 and 10 of Decree-Law no. 10/2011, of 20 January (Legal Regime for Arbitration in Tax Matters, hereinafter referred to as LRATM), against the Tax and Customs Authority (hereinafter AT), with the objective of obtaining the annulment of the dismissal of the Gracious Complaint filed against the stamp duty assessment acts no. 2015…, 2015…, 2015… relating to the year 2014, in the total amount of €13,939.25.

The petition for establishment of the Arbitral Tribunal was accepted by the Esteemed President of CAAD on 04.08.2016 and automatically notified to the AT.

In accordance with the provision of paragraph c) of article 11, no. 1 of the LRATM, the sole Arbitral Tribunal was constituted on 12.10.2016.

The AT responded, defending the lack of merit of the petition, arguing for the maintenance of the assessment act as embodying correct interpretation of item 28 of the General Table of Stamp Duty (GTSD).

The meeting referred to in article 18 of the LRATM and the conduct of final submissions were dispensed with, in view of the nature of the matter contained in the case file.

The Arbitral Tribunal was duly constituted.

The parties possess legal personality and capacity, are legitimate (articles 4 and 10, no. 2, of the same statute and article 1 of Regulation no. 112-A/2011, of 22 March) and are properly represented.

No nullities, exceptions or preliminary issues exist that would prevent immediate examination of the merits of the case.

II. STATEMENT OF FACTS

Based on the evidence in the case file, the following facts are deemed proven:

A. The Applicant is a Portuguese limited company that conducts its activity with CAE … - construction of buildings (residential and non-residential);

B. In the context of its activity, the Applicant is the owner of a land lot for construction (hereinafter property), described in the Property Registry Office of Lisbon under no. …, of the parish of … and registered in the urban property matrix under article …, of the parish of …, of the municipality of Lisbon (document nos. 5 and 6);

C. The property is a land lot for construction whose building is intended for housing (document no. 5);

D. The taxable property value (TPV) of the property for IMI purposes is €2,906,945.26 (document no. 5);

E. The Applicant was notified of the stamp duty assessment act identified in the case file, pursuant to item 28.1 of the GTSD;

F. The Applicant paid the amount underlying the stamp duty assessment act, in the amount of €13,939.25 (document no. 1);

G. On 27 August 2015, the Applicant filed a gracious complaint against the stamp duty assessment act sub judice;

H. On 18 April 2016, through Memorandum no. …, the Applicant was notified of the dismissal of the gracious complaint filed.

With relevance to the decision, there are no facts that should be considered as unproven.

Taking into consideration the positions assumed by the parties, in light of article 110, no. 7 of the Code of Tax Procedure (CTP) and the documentary evidence in the case file, the facts listed above are deemed proven, with relevance to the decision.

III. LEGAL ISSUES

The principal issue arising in the present case is whether the norm contained in item 28.1 of the GTSD underlying the assessment act sub judice is materially unconstitutional by violation of the principle of tax equality and of taxpaying capacity.

In this sense, the Applicant contends, in summary, the following:

1. The assessment act in question was executed in manifest violation of the principle of tax equality, provided for in articles 12 and 13 of the Constitution of the Portuguese Republic ("CPR") and article 55 of the General Tax Law, which requires that taxpayers with greater taxpaying capacity be treated differently from those who possess lesser taxpaying capacity;

2. In this sense, Casalta Nabais states that the principle of fiscal equality has always inherently contained the idea of generality or universality, under which all citizens are bound to comply with the duty to pay taxes, and of uniformity, requiring that such duty be assessed by the same criterion – the criterion of taxpaying capacity (cf. Casalta Nabais, José – Tax Law, 6th Edition, 2010, p. 149).

3. Indeed, only the criterion of taxpaying capacity can legitimize equal tax treatment for equal situations and different tax treatment for different situations, for which reason Casalta Nabais's understanding is to the effect that taxpaying capacity implies "equal tax for those with equal taxpaying capacity (horizontal equality) and different tax (in qualitative or quantitative terms) for those with different taxpaying capacity in proportion to such difference (vertical equality)" (cf. Casalta Nabais, José – Tax Law, 6th Edition, 2010, p. 149).

4. Thus, as has been uniformly understood by the Constitutional Court, the principle of equality, as a limit on legislative discretion, does not prohibit the establishment of distinctions, but rather prohibits the promotion of distinctions lacking objective and rational justification;

5. It is not possible to find plausible justification, within the spirit of the legislator, for the negative discrimination made by Item 28.1 of the GTSD regarding land with residential use whose TPV is equal to or greater than €1,000,000.00 relative to the taxation of built residential properties constituted in condominium ownership, or in vertical ownership, whose autonomous units or units of individual use do not exceed, in their respective TPV, the value of €1,000,000.00, but whose total TPV is equal to or greater than that same value, since the result is that the holder of the ownership right of a land lot for construction, intended for housing, with a TPV exceeding €1,000,000.00, suffers heightened taxation relative to that which will apply from the moment it has proceeded to construct a residential property on the land for construction.

6. Similarly, no justification is found in light of the principle of equality for the negative discrimination operated regarding residential properties with a TPV equal to or greater than €1,000,000.00 and regarding land for construction with residential use with the same value, since the current value of wealth and/or the potential value of enrichment afforded by the unbuilt land is not equal – it is rather, necessarily inferior – to the current value of wealth and, by that means, of taxpaying capacity, real or presumptively afforded by built property, since mere ownership of a land lot for construction does not appear, per se, to be an indicative criterion of the greater taxpaying capacity of its owner;

7. It is therefore to be concluded that the norm of item 28.1 of the GTSD, in the wording introduced by Law no. 83-C/2013, of 31 December, is materially unconstitutional, by offense to the principle of equality, provided for in article 13 of the CPR, as applied to land for construction with TPV equal to or greater than €1,000,000.00 for which authorized or planned construction does not include any unit capable of independent use with value equal to or greater than that amount.

8. In this sense, the arbitral decision rendered in the course of the arbitration process no. 507/2015-T, of 17 March 2016, which states that "In fact, it lacks rational justification to tax based on hypothetical elevated taxpaying capacity situations of ownership of rights over land for construction in which are authorized or planned buildings exclusively composed of units of individual value below €1,000,000.00 and not apply the same taxation to situations in which on the land such buildings have already been constructed, with enormous increase in the taxable property value of the building, since 'the value of the building footprint varies between 15% and 45% of the value of authorized or planned buildings'. As for land for construction intended for construction of autonomous dwellings of value equal to or greater than €1,000,000.00, ownership of rights over land with this purpose reveals, in itself, a situation of wealth, at the level of 'the highest standards of Portuguese society': that is, if the land, in itself, has value equal to or greater than €1,000,000.00 and is intended for construction of individual dwellings of value also equal to or greater than this, one is faced with situations in which mere ownership of rights over the land reveals wealth corresponding to 'the highest standards of Portuguese society'. Item 28.1 of the GTSD, in the part relating to land for construction, contains, however, no limitation to its application as a function of the value of authorized or planned dwellings, so that it must be concluded that it makes its application depend only on the taxable property value of the land itself."

9. The land in question constitutes, for the Applicant, an essential factor of production for the pursuit of its corporate purpose, the patrimonial substrate of its economic activity, which it intends to generate profit through the construction and resale of the autonomous units identified;

10. Whence it is concluded that land for construction and resale, regardless of its respective TPV, when constituting property of commercial companies whose corporate purpose is real estate activity, are merely means of pursuit of their respective economic activity, for which reason, in this case, one cannot attribute to it the essential requirement of Item 28, that property over such land could be symptomatic of greater taxpaying capacity or "of wealth".

11. Furthermore, taxation, under stamp duty, of the properties provided for in item 28.1 of the GTSD is therefore subject to double taxation, constitutionally inadmissible, resulting from the overlap between stamp duty and property tax (IMI).

12. Indeed, residential properties and land for construction whose authorized or planned construction is for housing are already subject to property tax (IMI), the legitimacy of which resides in the taxation of urban properties located in Portuguese territory, as results from the provision of article 1 of the Property Tax Code (CIMI).

13. Now, property tax (IMI) is a tax that is levied on properties and whose taxable event is precisely the ownership of such assets, under article 8, no. 1, of the CIMI.

14. Thus, there is double taxation, both under stamp duty and under property tax, of the same legal reality – the ownership of properties.

15. In view of what has been stated above, the illegality of the Memorandum of the Head of Administrative Justice Division (in substitution), dated 28 December 2015, which determined the dismissal of the Gracious Complaint filed against the said tax assessment act which is also the subject of this petition for arbitral pronouncement, is also manifest.

16. In view of the above statement in this petition for arbitral pronouncement, there are no remaining doubts that the payment of undue tax already made is attributable only to the fault of the services, for which reason all requirements that the Law makes depend on the recognition of the right to compensatory interest are met, which is hereby requested.

For its part, the AT alleges, in summary, the following:

1. In the property file of the real estate, the type of property is "land for construction";

2. Fiscally, the real estate are land for construction, in that capacity they were acquired and thus are cadastrally classified and, therefore, are without doubt, land lots for construction, more precisely urban properties with residential vocation.

3. On the matter of determination of the TPV of land for construction, JOSÉ MARIA FERNANDES PIRES considers, in Lectures on Patrimony and Stamp Duty, Almedina, Coimbra, 2011, pag. 100 and 101, that "The methodology followed in the Property Tax Code for the determination of the taxable property value of real estate is also very close to the terms used in the real estate market to ascertain the value of such land.

In the market, the value of a land lot for construction depends not only on its intrinsic characteristics, such as its area and its location or its topography.

More important than that is a factor that is intrinsic to it and that depends on the public authorities, which is its construction potential, namely the authorized volumetry and the characteristics of a reality that does not yet exist, which is the urban property that will be able to be constructed on it. The value of a land lot for construction corresponds, fundamentally, to a legal expectation, embodied in a right to construct a property on it."

1. There is also no double taxation, since property tax (IMI) and stamp duty (IS) are different taxes, as the Applicant itself distinguishes them.

2. Item 28 is a norm in accordance with the Constitution of the Portuguese Republic, since the legislator defined an economically justified requirement, constitutionally valid, as a manifestation of taxpaying capacity (whose recipients effectively have special taxpaying capacity in light of the adopted criterion) required for the payment of this tax.

3. Note that the reduction of inequalities, which presided, as will be demonstrated below, over the presentation of Bill no. 96/XII (2nd), the legislator intended to distribute the sacrifices imposed by Austerity, by all, allowing the discrimination of patrimonies, without that, as the Applicant intends, offending Constitutional provisions, namely the principle of equality, whether per se or in its aspect of taxpaying capacity, since this does not result in unjustified differences in treatment between taxpayers, since different situations are treated differently, in line with that constitutional principle.

4. It is, unequivocally, a norm of general and abstract character, applicable indistinctly to all cases in which its respective requirements of fact and law are met.

5. Indeed, the different valuation and taxation of a property with residential use versus a property intended for commerce, industry or services, or even a rural property, results from the different aptitude of the properties in question (housing/services/commerce/industry/agricultural activity), which supports the different treatment given by the legislator who, for economic and social reasons, decided, within its freedom of conformation, to exclude from the incidence of the tax properties intended for purposes other than residential;

6. Item 28.1 GTSD emerged in an exceptional context and of evident difficulties that the Country, in particular the public accounts, faced during compliance with the adjustment program to which the Portuguese Republic obliged itself and which had as guiding document the Memorandum of Understanding on the Conditionalities of Economic Policy, of 17 May 2011.

7. Also relevant to what brings us here is the reference to the Report that accompanied the Draft State Budget for the year 2013, from which emerge the following considerations: "(…) it was necessary to find a set of substitute measures for those considered unconstitutional by the Constitutional Court.

8. The Government's solution in this matter is based on a comprehensive approach that takes into account the implications of the principle of equality in the distribution of public burdens.

9. From the foregoing, it is clear that the tax legislator considered that the ownership, usufruct or right of superficies of a residential property or land for construction whose authorized or planned construction was for housing, of TPV equal to or greater than €1,000,000.00 represented a manifestation of wealth and was capable, by itself, of revealing significant taxpaying capacity, thus making item 28.1 of the GTSD apply to the possession of a certain type of properties, as opposed to labor income and pensions, already affected by other fiscal measures (and not only).

10. Regarding a difference of situations between ownership of "concentrated" real estate patrimony (a single property with value of €1,000,000) or "dispersed" real estate patrimony (several properties whose total value equals €1,000,000) one must immediately note that the measure enshrined in item 28.1 of the GTSD is, in its own essence, entirely unrelated to any consideration or global assessment of the taxpayer's real estate patrimony;

11. The essential objective of the legislator was to enshrine individualized taxation of "high-value properties intended for housing", of "homes valued at equal to or greater than 1 million euros", or, colloquially, of luxury real estate or homes.

12. Indeed, the factual-legal reality selected by the legislator to constitute the basis of the incidence of the tax is the property itself considered, in attention to its use and its taxable property value, not the global real estate patrimony of the taxpayers.

13. Since, at the date of the facts, the Tax Authority made application of the law in the terms to which as an executive body it is constitutionally bound, one cannot speak of error of the services under the provision of article 43 of the General Tax Law, nor is there place for the payment of compensatory interest.

Let us see what must be understood.

IV. DECISION

A. The principles of tax equality and taxpaying capacity

The Constitution of the Portuguese Republic (CPR) establishes in its article 13 the principle of equality, in the following terms:

1. All citizens have the same social dignity and are equal before the law.

2. No one can be privileged, benefited, prejudiced, deprived of any right or exempted from any duty on grounds of ancestry, sex, race, language, territory of origin, religion, political or ideological convictions, education, economic situation, social condition or sexual orientation.

Article 103 of the CPR provides, in turn, that:

1. The fiscal system aims at satisfying the financial needs of the State and other public entities and a just distribution of income and wealth.

2. Taxes are created by law, which determines the incidence, the rate, tax benefits and the guarantees of taxpayers.

3. No one can be obliged to pay taxes that have not been created in accordance with the Constitution, that have a retroactive nature or whose assessment and collection are not made in accordance with the law.

Under article 104 of the CPR:

1. Tax on personal income aims at the reduction of inequalities and shall be sole and progressive, taking into account the needs and income of the household unit.

2. Taxation of companies is based fundamentally on their real income.

3. Taxation of patrimony must contribute to equality among citizens.

4. Taxation of consumption aims at adapting the structure of consumption to the evolution of the needs of economic development and social justice, and should impose burdens on luxury consumption.

It is in light of the aforesaid rules that the constitutionality of the norm contained in items 28 and 28.1 of the GTSD should be assessed, which determines the incidence of stamp duty on:

"Ownership, usufruct or right of superficies of urban properties whose taxable property value contained in the matrix, under the Property Tax Code (CIMI), is equal to or greater than €1,000,000 – on the taxable property value used for IMI purposes:

28.1 – For residential property or for land for construction whose authorized or planned construction is for housing, under the terms provided in the Property Tax Code…… 1%."

From the analysis of the constitutional rules referenced, it results that the constitutional principle of tax equality constitutes a specific expression of the general structuring principle of equality, "which translates not only a formal equality – an equality before the law, (…), but also and above all a material equality – an equality of the law, which obliges, in various respects, also the legislator."[1]

Thus, the principle of fiscal equality unfolds in two aspects: the aspect of the generality of taxes and the aspect of the uniformity of taxes.

In the aspect of the generality of taxes, the principle of fiscal equality determines that the duty to pay taxes is universal, whereas in the aspect of the uniformity of taxes the said principle implies the adoption of the same criterion for all taxpayers.

Fundamentally, "the principle of fiscal equality requires that what is (essentially) equal be taxed equally, and what is (essentially) unequal be taxed unequally in the measure of that inequality."[2]

To ascertain what is equal and what is unequal, there then emerges the criterion of taxpaying capacity, which is concretized in the aspect of horizontal equality when it requires that taxpayers with the same taxpaying capacity pay the same tax, and in the aspect of vertical equality, in so far as it leads to taxpayers with different taxpaying capacity paying different taxes (qualitatively and/or quantitatively), with arbitrariness prohibited.

In this connection, the Applicant understands that stamp duty on ownership, usufruct or right of superficies of urban properties with residential use and land for construction, of taxable property value exceeding €1,000,000.00, at the rate of 1%:

a) Does not respect the principle of equality, in that taxation applies only to land for construction whose construction is for housing and not to the construction of a residential property on a land lot for construction;

b) Violates the principle of equality, since it determines an unjustified negative discrimination of companies engaged in the sale of land for construction;

c) Violates the principle of prohibition of double taxation resulting from the overlap between stamp duty and property tax.

The Applicant's argument is not, however, well-founded.

In truth, the principle of tax equality does not result in the prohibition of the freedom of choice on the part of the Legislator of taxation of certain taxable events to the detriment of others, but rather the prohibition of arbitrariness.

In the case under analysis, the Legislator considered that on urban residential properties and (later) on land for construction whose construction is for housing the commonly designated "luxury tax" should apply, within the framework of the effort of budgetary consolidation.

The purpose of such taxation was to distribute among property owners of high-value residential properties the sacrifices required from those who live from the income of their labor (See Economic and Financial Adjustment Programme (EAFP), agreed between the Portuguese Government and the IMF, the European Commission and the ECB).

The creation of this new taxable event occurred in the context of economic crisis and grave crisis in public finances, with the purpose of increasing State tax revenues, through taxation of those who reveal greater indicators of wealth.

In truth, through item 28.1 of the GTSD it is intended to tax wealth exteriorized in ownership, usufruct or right of superficies of luxury urban properties which, by their value substantially superior to that of the generality of urban properties, reveal greater indicators of wealth, capable of grounding the imposition of increased contribution to the health of public accounts to their holders, in realization of the aforesaid "principle of social equity in austerity, ensuring an effective distribution of the sacrifices necessary for compliance with the adjustment program." – (See Bill no. 96/XII).[3]

In this context, taxation applies not only to land for construction whose construction is for housing, but also to the construction of a residential property on land for construction, when the TPV of such property is, subsequently, eligible, under item 28.1 of the GTSD.

There is thus no reason to justify the violation of the principle of equality between the said taxable events, since both facts are potentially subject to taxation, under legal terms, at different times. Since it is not possible to compare the incomparable, that is, the present property and the future property or properties, due to the absence of a comparative term.

Nor does the Applicant's argument regarding the unjustified negative discrimination of companies engaged in the sale of land for construction stand, given the context of budgetary consolidation effort underlying the creation of the norm and the public interest thus invoked.

Moreover, not only are tax benefits provided for under property tax and transfer tax, certainly applicable to the Applicant, in the context of its real estate commercialization activity, not applicable to other taxpayers, but also properties assigned to business activities are excluded from taxation under stamp duty.[4]

It has been understood that "Only those choices of regime made by the ordinary legislator can be censured on the grounds of breach of the principle of equality in those cases where it is proved that they result in differences of treatment between persons that find no justification in reasonable, perceptible or intelligible grounds, having the constitutional aims that, with the measure of the difference, are pursued (…) this principle, in its dimension of prohibition of arbitrariness, constitutes an essentially negative criterion (…) which, not eliminating 'the freedom of legislative conformation' – understood as the freedom that pertains to the legislator of 'defining or qualifying the situations of fact or the relations of life that are to function as elements of reference to be treated equally or unequally' – pertains to the courts not the faculty of withdrawing from the legislator, 'weighing the situation as if they were in its place and imposing their own idea of what would be, in the case, the reasonable, just and opportune solution (of what would be the ideal solution of the case)', but rather that of 'rejecting those legal solutions altogether incapable of credentialing themselves rationally.'"[5]

Having regard to the foregoing, it is considered that the taxable events contemplated by item 28.1 of the GTSD were not chosen in an arbitrary manner, their choice being justified by the underlying political-economic context. This understanding has, moreover, been repeatedly expressed by the Constitutional Court[6] which, in Decision no. 590/2015, understands the following:

"no arbitrary fiscal measure is found in the incidence norm under examination, because lacking in rational foundation. (…) the legislative amendment had as its purpose to broaden the taxation of patrimony, making it fall more intensely on the property which, by its value substantially superior to that of the generality of urban properties with residential use, reveals greater indicators of wealth and, as such, is capable of grounding the imposition of increased contribution to the health of public accounts to its holders, in realization of the aforesaid 'principle of social equity in austerity.

(…)

Thus, the assessment of respect for the principle of tax equality in its material dimension must be referred to the unit of property assigned to housing, which results in the conclusion that (…) there is no arbitrary discrimination between taxpayers in the uniform operation of the relevant substantive criterion, translated in the attribution to each property with residential use of taxable property value equal to or greater than €1,000,000.00."

The Applicant's argument that the incidence norm here under discussion violates the principle of equality thus does not stand.

For the reasons set out above, this Tribunal also does not consider that the principle of taxpaying capacity is belittled by the exclusion of other properties, beyond those contemplated in the norm, that reveal equal taxpaying capacity.

In truth, the principle of taxpaying capacity does not apply equally with respect to every type of tax, having an expression of 1st degree in taxes on income, an expression of 2nd degree in taxes on patrimony and an expression of 3rd degree in taxes on consumption.

Thus, it is understood that as to the taxation of patrimony, the Legislator is essentially obliged to contribute to equality among citizens (article 104, no. 3 of the CPR), which does not prevent it from proceeding to discrimination of patrimonies, taxing the higher ones and exempting the lower ones, it being certain that from such principle does not result the obligation of the existence of a tax on patrimony with progressive rates.

Having regard to the principle of taxpaying capacity, as a criterion for determining respect for the principle of tax equality, it is noted that the taxable event chosen by the legislator in item 28.1 of the GTSD is revelatory of taxpaying capacity, there also being a connection between the tax obligation and the economic requirement selected by the Legislator.

Indeed, the norm under analysis chose as economic requirement the right of ownership, usufruct or right of superficies of urban properties or land for construction whose construction is for housing, of taxable property value exceeding €1,000,000.00 and to such economic requirement made correspond a rate of 1%.

In sum: having regard to the fact that from the urban property file of the property under analysis it appears that the use of the property is housing and that its TPV is €1,393,925.30, the rate provided for in item 28.1 of the GTSD is applicable here, there being no violation of the principle of tax equality.

B. On the violation of the principle of double taxation

The Applicant alleges that taxation under stamp duty of the properties provided for in item 28.1 of the GTSD is subject to double taxation, constitutionally inadmissible, resulting from the overlap between stamp duty and property tax.

It happens that, in order to consider that there is double taxation, it is necessary that the identity of the object, the identity of the subject, the identity of the period of taxation and the identity of the tax be verified.[7]

In the case under analysis, that identity does not exist, although the taxable event under stamp duty is land for construction with residential use, of value exceeding €1,000,000, while under property tax, taxation applies to any and all properties. Also, the subjects of the tax legal relationship are different, since under stamp duty, the relationship is established between the taxpayers and the State, and in the case of property tax, between the taxpayers and the Municipalities.

Having regard to the fact that the CPR does not require, as to taxes on patrimony, the existence of a sole and progressive tax (See article 104, no. 3, of the CPR), and that there does not exist absolute identity between the taxable events under analysis, it is understood that taxation under stamp duty, through item 28.1 of the GTSD, falls within the scope of the discretion permitted by the Constitution, there being no violation of the principle of prohibition of double taxation.

V. DECISION

For the above reasons, this Arbitral Tribunal decides to render judgment wholly dismissing the petition for declaration of illegality and consequent annulment of the stamp duty assessment act relating to the year 2014, concerning the land for construction registered in the urban property matrix under article …, of the parish of …, of the Municipality of Lisbon.

VI. VALUE OF THE CASE

In accordance with the provision of article 306, no. 2 of the Code of Civil Procedure, article 97-A, no. 1 a) of the CTP and article 3, no. 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the petition is fixed at €13,939.25.

VII. COSTS

Under the provision of articles 12, no. 2 and 22, no. 4, both of the LRATM, and article 4, no. 4 of the Regulation of Costs of Tax Arbitration Proceedings, the amount of the arbitration fee is fixed at €918, in accordance with Table I of the said Regulation, to be borne by the Applicant.

Let notice be given.

Lisbon, 18 November 2016

The Arbitrator,

Magda Feliciano

(The text of this decision was prepared by computer, under article 131, no. 5, of the Code of Civil Procedure, applicable by reference from article 29, no. 1, paragraph e) of Decree-Law no. 10/2011, of 20 January (LRATM), its drafting being governed by the orthography prior to the Orthographic Agreement of 1990.)

[1] José Casalta Nabais, in The Fundamental Duty to Pay Taxes, Almedina Theses, 2009, pp. pag. 435.

[2] Op. Cit. pp. pág. 442.

[3] See Decision of the Constitutional Court no. 590/2015, rendered in the course of process no. 542/2014.

[4] As José Maria Fernandes Pires teaches, "the application of the tax to properties with residential use and to land for construction in which the construction of housing is planned and approved, reveals the intention of not burdening the productive sector and companies in general. In fact, properties assigned to business activities, namely commerce, services or industrial activity, can reach a value exceeding one million with relative ease, without that fact being able to reveal relevance in terms of wealth identical to that revealed by those with residential use with the said value.

[5] See Decision of the Constitutional Court no. 187/2013, of 5.04, nos. 33 and 35.

[6] Decisions of the Constitutional Court no. 590/2015, no. 83/2016, no. 247/2016 and no. 568/2016.

[7] Casalta Nabais, in Tax Law, 6th Edition, 2010, p. 229.