New measures for housing: what you need to know

The government is trying to address the housing shortage issue and has taken steps to increase the number of affordable homes for its citizens in Portugal. Find out what measures are under consideration.

Housing in Portugal

Housing is a very pressing issue in Portugal right now. Under public pressure and to address a problem that has been growing in recent years, especially in Lisbon, Porto, and the Algarve region, the government made a decision on February 16 to intervene in the economy. However, while this intervention has been long awaited by some, for others it may mean a violation of their most basic rights.

Events of the "More Housing" bill

• Increase in housing- The government will allow the use of commercial real estate for residential purposes without the need for a permit. Additionally, the state will be able to provide land for the construction of affordable housing as part of a housing project development scheme.
• Simplification of licensingThe goal is to speed up the licensing process (which can sometimes take years) by penalizing municipalities for delays in issuing licenses. Additionally, developers who do not meet construction deadlines will also be fined.
• Tenant support- The government will cover rent after three months of non-payment to strengthen the rental housing market. According to the government, "all eviction requests received after three months of non-payment" may be paid for by the state.
• Increase in public housing- A proposal is being made to exempt capital gains tax (the tax levied on homeowners when they sell their houses) if they sell their homes to the government. These homes will then be offered by the government on the rental market at affordable prices.
• Mortgages- There will also be a capital gains tax exemption for paying off a mortgage on the primary residence of the owner or their children. Additionally, despite many banks making it difficult for their clients to access fixed rates, there will be a mandatory offer of this option for those seeking a loan.
• “Golden visas”- Due to the end of speculation in real estate, the government has decided to stop issuing "golden visas." However, "as for the already issued golden visas, there will be an opportunity for their extension if the property purchased is intended for the primary residence of the owners themselves or their children, or if the property is continuously offered on the rental market," the Prime Minister stated.
• Housing rental- The new rental agreements will now include criteria that limit rent increases. "For new contracts, the new rent must be the result of the last rent plus any updates that may have been made during the term of the contract," explained the Prime Minister.

Property owners who are concerned about those who do not want to rent their property to the state may face formal deadlines for the use of their real estate. The document states that only after this period expires "can the state forcibly rent out the property, taking into account public interests." Thus, the state will finance municipalities to carry out work and utilize these unoccupied homes in the rental market.

Another measure that is causing a lot of outrage is the one aimed at transforming Rental Housing (AL) into a rental market. New licenses for local accommodation will now be banned, except in rural areas of municipalities where there is no housing shortage. As for the existing licenses, they will be reviewed in 2030 and then every five years.

To encourage the transition of Rental Housing to the rental market, owners who do so will be exempt from personal income tax until 2030, provided they transfer their property by 2024.

Different perspectives

On one hand, housing is a right for all citizens, enshrined in the Constitution, but on the other hand, property owners believe that their rights to ownership and private initiative are being violated by these measures. The Association of Portuguese Builders and Real Estate Investors (APPII) accuses this bill of "forcing the rental of vacant properties, which is a violation of the right to private property," and believes that it only "undermines investor confidence." The Association of Hostels in Portugal stated that the measures presented by the government regarding housing, including those related to local accommodation, were "thoughtless" and "will destroy many businesses." Owners of rental properties plan to hold a protest on March 1 in Lisbon against these government measures. On the other hand, the Lisbon Tenants' Association (AIL) expressed satisfaction with the new housing legislation introduced by the government. President Roman Lavadinhu considers the proposed measures positive but fears that the government will take too long to implement the plan.

In general, anyone who disagrees with this proposal can express their opinion by March 10, as this draft law is currently open for public discussion on the website.https://www.consultalex.gov.pt/ConsultaPublica_Detail.aspx?Consulta_Id=287.

Paula Martins is a fully qualified journalist who finds a means of self-expression in writing. She studied journalism and communication at the University of Coimbra and recently studied law in the Algarve. Press card: 8252 Paula Martins