The Portuguese government announced a new housing strategy under the “Mais Habitação” initiative. This new plan includes 30 specific steps and aims to address Portugal’s housing shortage issues. The program is created by focusing on a strategy to increase Portugal’s housing supply. Eventually, the goal is to improve public housing options and to maintain the accessibility and affordability of housing. In addition, it will work on reducing the bureaucratic processes.
Addressing Housing Supply Shortages and New Construction
The housing measures will finance the build-to-rent projects. Dedicated credit lines will be provided to encourage the development of built-to-rent properties in Portugal, which is expected to expand the supply of renting housing units.
There will be an industry collaboration pact. Also, the Portuguese government will engage closely with the industry stakeholders, aiming to increase construction capacity. Promoting stable production processes, implementing process industrialization, and attracting and training local workers will be included in this program.
The VAT for rehabilitation and construction will be reduced. The current legislative term will soon be concluded. Until then, Value Added Tax (VAT) will be reduced to 6% for approved rehabilitation and construction projects. These will also be subject to price limits.
Boosting Public Housing Options
The new housing options will unlock PRR housing units. The government plans to use shortened municipal liability terms. The aim will be to accelerate the release of 25,000 housing units that are now under the Recovery and Resilience Plan (PRR).
The government also plans to strengthen IHRU’s capacity. The promotional capacity of the Housing and Urban Rehabilitation Institute (IHRU) will be increased. In the end, it will enable more public construction projects under the Affordable Rental Program.
Rental Market: Restoring the Confidence
There will also be investment contracts for build-to-rent and available-to-let properties. The specific contracts will be created with the goal of boosting investment in build-to-rent and available-to-let-properties. Eventually, it will result in a more stable long-term rental market.
The government’s next steps will be followed by safeguarding both tenants and landlords. This step will include taking on the role of landlord and subsidizing rent payments for up to three months in the event of tenant default. Moreover, flexibility and trust in the Urban Rental Regime will be aimed to be restored by the planned legislative amendments.
The CEAL” (Extraordinary Contribution to Local Accommodation) will not continue. The program will also simplify and decentralize the regulations for local accommodations. In addition, there will be adjustments to license expiry, transferability, and the aging coefficient.
Simplifying the Bureaucracy for Faster Development
The red tape related to building and urban planning is planned to be cut through by the Urbanistic Simplex Program. Hence, the real estate development will be more efficient since the licensing procedure is expedited.
Municipalities will use BIM for licensing purposes because of the expedited construction processes.
New Opportunities for Real Estate Investors in Portugal
All these initiatives mainly create intriguing new opportunities for real estate investors in Portugal. The new construction housing, long-term rental programs, and rehabilitation initiatives are all included in the possible opportunities. The program is actually a significant change toward a more inclusive and dynamic housing market in Portugal. It creates a comprehensive plan and aims to alleviate the current housing problem, creating a more appealing environment for real estate investment. Thereby, it promotes long-term economic growth at the same time.
If you want to learn more, you can read our guide on “buying property in Portugal.”