Portuguese real estate taxation, land use and noise

Abstract

The goal of this study is the analysis of noise influence on real estate values as Portuguese Noise Code enforces building restrictions on municipal urban areas exceeding established noise limits. At present, municipalities are defining noise classification maps (mixed/sensitive areas) and, with noise maps, will determine conflict areas. On these areas, and until mitigation measures enable noise reduction, private contractors will have their building permits refused on an excessive noise basis. In 2003, the Portuguese government issued the decree-law 287/2003, concerning Real Estate Taxation. Nominal valuation of urban property was considered outdated and in need for reassessment with a new evaluation system based on objective parameters (construction cost, built area, site location, construction quality and building purpose). As municipalities will have to communicate the inadequacy of vacant land for building construction, the following steps will be the reduction of nominal real estate value (based on building construction potential) and the taxes income. The relationship noise/real estate taxes is based on GIS analysis performed on Portuguese cities, grouping land use, noise maps, noise classification areas and location coefficients. The combination noise maps/noise classification maps provides conflict areas and then, together with land use constraints, was possible to determine vacant land building potential. This construction potential will not be effective as those properties have excessive noise levels. Then, considering location coefficient (delineated by national authorities) is possible to evaluate new nominal values and potential loss regarding municipal taxes income. This will be an important incentive for municipalities to implement their ongoing noise reduction plans.