in Portugal to help with rent payments in housing crisis

In Portugal, there are an increasing number of young people working but not financially able to pay the rent, so they stay with their parents. Many Lisbon residents are moving to cities far from the capital in search of affordable rent, while many immigrants, including Brazilians, are looking for alternatives in smaller towns far from major urban centers. This is what Felipe Barbosa from the state of Ceará, who has been living in Portugal for almost four years, has done. The owner of a small construction services company found himself in a quandary when he decided to change his lease on a small house to an apartment in Lisbon County, where he already lived. He tried, but couldn't find anything suitable for the price. So he moved to the city of Barcelos, located in the north of the country, where he found the right accommodation. "There was an affordable apartment I could rent. This apartment cost half as much as the apartment I was going to rent in the Lisbon region," he recalls.

According to the plan, the state will regulate the cost of new leases, and that's not all. Those who have an income of around up to €1,100 per month and spend more than 35% of their salary on rent will be eligible for up to €200 in monthly assistance. "This is a temporary measure that will be in place for the next five years, which we consider desirable to normalize the rental housing market and create affordable rental housing," Portuguese Prime Minister António Costa stressed. Those who have a mortgage and fit the same profile - income up to around €1,100 and rent exceeding 35% of salary - will receive €60 monthly assistance to help with mortgage payments. In addition, banks will be required to have a fixed rate for mortgage loans.

The housing problem is caused by several factors. One of them is the so-called "place of residence," which means temporary housing. A lot of apartments in Lisbon and Porto are being turned into accommodations for tourists instead of being available for rent to locals. Lisbon already has more than 100,000 such places.

With around 90% of bank loans to buy your own home in Portugal subject to volatile interest rates, the interest rate hike on mortgages is significant - many families have seen their house payments double in the last year. Brazilian real estate consultant Ana Paula Oliveira, who has been working in the Portuguese market for six years, has witnessed the difficulties and uncertainty faced by people trying to buy their own homes in these difficult times. "Today we do a 'bank appraisal' for a client, and 30 days from now we don't know if they will have the financial ability to buy the same home. If we don't find housing within that period, we don't know if he will still have the same financial capacity 30 days from now," she told RFI.

To increase housing supply, the package also allows the government to rent and sublet vacant apartments, committing to pay rent if the tenant defaults. One proposal also suspends the issuance of new residency licenses, and licenses already issued would be reviewed by 2030. The exception is rural housing in inland locations. In an effort to combat speculation in the real estate market, the plan also stops issuing new "golden visas," so-called residency permits for investments. Issued visas may be extended if the dwelling is intended for the owner's own and permanent residence or that of his heir, or if the property is rented. Some of the proposals are up for public comment through Friday. Once approved by the Council of Ministers, it will be sent to Parliament for a vote.