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“Construir Portugal”: 30 new measures regarding housing in Portugal

Portugal recently underwent changes in government and, naturally, habitation is one of the most urgent topics to be addressed. As such, after an initial outline, the prime minister has now announced a concrete set of measures to resolve the housing crisis in Portugal – “Construir Portugal” (Build Portugal) -, 30 overall measures with an execution time ranging from 10 days to four months.

Frederik Pohl
Frederik Pohl, CEO
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After suggesting the revocation of all Mais Habitação measures and having that proposition flunked by parliament, the PSD government announced a different set of procedures regarding habitation. Called “Construir Portugal”, it naturally focuses on construction; however, there are a lot of other measures in the program, particularly regarding the very much disputed Alojamento Local. Let’s look into these 30 courses of action, divided by section.

‘Construir Portugal’ housing measures

Encourage Supply

  • Making Public Buildings Available for Housing (built to rent) with affordable rent;
  • Semi-automatic legal regime for use of vacant or underutilized public buildings by case-by-case presentation of a housing program;
  • Amendment of the Land Law to allow the use of rustic soil for sustainable housing solutions, such as Controlled Cost Housing and the Affordable Rent program; Temporary accommodation and supply for certain professions that involve moving (teachers, police, …);
  • Creation of a Construction Bonus to increase urban density indices and limits;
  • New urban centers around areas of urban pressure (like downtown Lisbon and Porto), with sustainable urban plans and in coordination with the development of public transportation;
  • State guarantee on credit for the construction of cooperatives with delivery of public land;
  • Credit lines to promote built-to-rent projects;
  • Pact with agents in the sector to increase construction capacity, involving stability of production capacity, the industrialization of the process, and qualification of the local workforce;
  • Reduction of VAT to the minimum rate of 6% for housing rehabilitation and construction works, with limits depending on prices.

Promote Public Housing

  • Unblocking 25,000 houses from the Recovery and Resilience Plan (PRR) with the adoption of a term of responsibility from the municipal councils, in order to speed up the processes;
  • Increased funding to enable the development of thousands of other candidate dwellings that aren’t funded by the PRR;
  • Strengthen the IHRU (Housing and Urban Rehabilitation Institute), through the public construction program EPE.

Renting

  • Revocation of forced renting that was implement by the Mais Habitação program;
  • Revocation of the guarantee and substitution of the Government as tenant when people can’t make rent;
  • Correcting the distortions introduced into the Urban Lease Regime over the last eight years in order to restore flexibility and confidence to the rental market (via appointing a working group);
  • Creation of the investment contract for built-to-rent and available-to-let programs.
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Óbidos, Portugal

Legislative simplification

  • Make it possible to set up one or more insurance contracts through a provider other than the one preferred by the lender, promoting healthy competition in the market;
  • Regulation, deepening and improvement of the legislation for reducing bureaucracy and simplifying urban administrative procedures;
  • Approve the Construction Code (Código da Construção);
  • Implementing the use of the BIM (Building Information Modeling) methodology and bringing municipal licensing platforms closer to the interface with economic agents;
  • Adapt the concept of controlled costs and affordable rent to reflect the affordable housing segment in each place and time, generating greater predictability and continuity in the market;
  • Repeal the Extraordinary Contribution on Alojamento Local (CEAL), the expiry of the license giving back AL regulation to the municipalities;
  • Creation of the IHRU Portal to monitor application processes with the aim of increasing transparency;

Foster support for young people buying their first home

  • Public guarantee for young people to enable bank financing for the purchase of their first home;
  • Exemption from IMT (Property Transfer Tax) and Stamp Duty on the purchase of a first home for young people up to the age of 35 for properties up to the 4th IMT bracket, i.e. up to 316,000 euros;
  • Reformulation of the Porta 65 rental support program, to put the young person’s economic reality first, putting an end to exclusions based on rent limits;
  • Emergency Program for Student Housing;
  • Implementation of the “National Accommodation Plan 2025-26” for students, with the provision of 18,000 more beds.
Ensuring housing accessibility
  • Streamlining rent subsidy programs, eliminating restrictions, particularly on expiry dates;
  • Creation of transitional regulations between supported rents and affordable rents, in order to ensure that there are no discontinuities in support.
How Pearls of Portugal can help

It’s true that the rental market in Portugal is undergoing a critical phase, but at Pearls of Portugal, via our long-term rental service, we find you exactly the property you’re looking for in the city or region of your preference. Or, if you’re buying a property here and plan on renting it out in the future, we take care of all bureaucracy and inform you of all the measures that you should be aware of.

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