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New Portuguese Government: What’s Changing in the Housing Market

As you may know, there were elections recently and the Portuguese government went through some major changes, going from the 9-year-long leadership of PS to PSD. The new prime minister and AD coalition party just presented their new program, which includes some major changes regarding the housing market in Portugal. Let’s go over them!

Frederik Pohl
Frederik Pohl, CEO
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Possible housing market changes in Portugal 2024

As previously stated, the new government, led by Prime minister Luís Montenegro, recently announced its proposed program for the next 4 years. Since housing is one of the biggest items on the Portuguese political agenda – and the European one, as well -, it is one of the subjects with the most changes proposed, together with health, taxes, and education. So what exactly is the government proposing?

Annulment of the Mais Habitação measures

Do you remember the Mais Habitação program? It was announced a little over a year ago by the previous government and consisted of a package of many changes to be implemented in the Portuguese housing market. These included the end of the Golden Visa program and the ban on new Alojamento Local licenses in heavily populated areas.

Well, the new government proposes that all Mais Habitação measures be revoked, stating, in the program, that “the answer to the housing crisis does not lie in administrative price controls, freezing rents or limiting them within very narrow bands, ignoring the rules in force for everyone”.

Is the Portuguese Golden Visa coming back? What about the NHR?

Since the government is proposing the withdrawal of all Mais Habitação measures, this would include reinstating the Golden Visa program. However, there is no direct mention of such action; the same goes for the NHR (Non-habitual Resident) tax program, which officially ended at the beginning of 2024. Nevertheless, AD politicians have suggested in the past that international investment programs would be worked on in case the party won.

For example, António Leitão Amaro, PSD’s vice president and Minister of the Presidency, said in February of this year that “there could be an improvement in the mechanisms for directing (the Golden Visa program) towards supporting the satisfaction of market failures or the need to increase the supply of affordable rent. This is a possibility to be analyzed.”

In the proposed program, there are only two references to international investment and residency visas, which are:

  • “Clarifying the rules for real estate investment and attracting investment (residents and non-residents)”;
  • “Changing the regime so that residence permits are based on previously concluded work contracts or through a work-seekers visa”.

To sum it up, there are no concrete answers regarding the Golden Visa and NHR programs right now. If you were hoping to apply to either of them, the future looks promising, but we definitely have to wait and see.

housing market portugal 2024
Typical old houses in Porto

The proposed housing measures for 2024 in Portugal

Portugal, just like Europe and the general rest of the world, is going through a housing crisis at the moment. In order to tackle this huge subject matter, AD’s housing proposition is divided between five strategic axes.

First axe: Increased supply (private, public and cooperative)

For the housing crisis to be eased, Montenegro’s executive states that the housing supply should be increased, be it through private investment, encouraged via fiscal incentives; public, through the mobilization of existing stock or new construction; or cooperative, through making the government partner up with private enterprises. These are some of the specific measures proposed:

  • Making land occupation limitations, urban densities and perimeters, and construction demands and requirements more flexible;
  • Creating conditions for “agricultural housing” at more affordable prices in rural and inland areas;
  • Putting vacant or underused public buildings and land in the housing market;
  • Eliminate or reduce tax costs on construction or rehabilitation work on properties intended for permanent habitation;
  • Creating a specific large-scale construction and rehabilitation program for general and student housing;
  • Encouraging new housing concepts, such as building to rent, modular housing and co-living;
  • Improving public transport around cities.
Second axe: Stabilizing the rental market
  • Evaluate the renting measures introduced in the last 8 years, in particular, those relating to duration and renewals;
  • Speed up the resolution of disputes in the event of non-compliance with rental contracts;
  • Evaluate the rent insurance mechanism that’s in place.
Third Axe: Aid for “vulnerable” tenants
  • Replace price limitations with public subsidies for tenants in situations of vulnerability/effective need;
  • Maintain, until the market stabilizes, the dynamic rent aid that guarantees a contribution to families with high effort rates.
Fourth Axe: Aid for young people (<35) buying their first house

This is one of the proposed measures that’s causing the most public discussion. AD’s government plans to free young people (younger than 35) from paying the IMT (Property Transfer Tax) and stamp duty (Imposto de Selo) when buying their first house. Plus, it plans to make getting a mortgage as a young person much easier.

  • Eliminate IMT and Stamp Duty for the purchase of permanent housing by people younger than 35;
  • Make it possible for young people to finance the entire price of their first home through a mortgage (even if they don’t have enough savings for a down payment).
housing market portugal 2024 aveiro
Houses in Costa Nova, Aveiro
Fifth Axe: Revoking “Mais Habitação” measures

As previously explained, the other major axe of the new program is the erasure of all the Mais Habitação measures implemented last year. These include:

  • Ban on new Alojamento Local licenses
  • Shutdown of the Golden Visa program
  • Compulsory leasing of vacant houses
  • The state paying interest increase on loans up to 200.000€
  • Increasing the number of houses available for rent
  • Curbing price speculation in rents
  • Banks being required to offer fixed rates
  • Fiscal incentives for affordable renting (PAA program)
  • Reduction of IRS rate for long-term rental contracts
  • Aid for low-income families (this measure stays, under the third axe of new propositions)

However, there is no specific mention in the program of which measures will be eradicated, changed, or improved.

Will the program be approved?

The propositions aren’t initially voted by Parliament, they are simply evaluated by the opposition parties, who can present motions to reject the program. Many parties have expressed their disapproval of the program, which can lead to it being voted on. If the draft resolutions presented by the opposition are approved – a minimum of 116 MPs (deputados) must be in favor – the Stability Program will go to a vote, forcing all political parties to adopt a position (this includes abstention).

Last updated Wednesday, April 17th

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