|Investment Property Worldwide.com||
The bad news this week for golf tourism is the decision from the Portuguese government to increase the VAT from 6% to 23% on all golf green fees.
Being a major golf destination this decision is going to devastate the tourist market for many years to come.
Since the start of the recession in late 2008 business has been difficult for many in the Portuguese travel industry, but in 2011 there has been an encouraging upturn with many clients returning from Spain, Turkey and other overseas golf destinations to play again in Portugal.
I am reliably informed that all golf courses were “advised” at the beginning of 2011 that they should charge 23% VAT on their green fees, but as this was never made official, only 6% was charged.
Courses have now been told that they all owe an extra 17% VAT on all the green fees sold during 2011.
Many of the smaller courses on the Algarve will probably have no funds to repay this shortfall and will have no alternative but to close, leaving the courses that survive increasing their fees to pay this backlog of VAT.
Hats off to the government for at least trying to reduce their EU debt, but with decisions like this I hope they will not be too surprised to find many golf courses closed, green fees that no one can afford, and hotels and other accommodation closed down during the buoyant winter golfing months, leaving many thousands without a job.
I can only assume that no one in the Portuguese government has any concept of how important the golf industry is to the economy of the country.
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