Portugal is no exception to the universal rule and is conditioned by the enormous and dramatic uncertainty that shakes and confuses the world. Even with these constraints, the new Portuguese government, which took office six months ago, is attempting to impose a logic of structural reforms. Among these reforms, special attention has been given to the recognised housing crisis. The government went so far as to acknowledge that nothing has been done in the last 20 years concerning housing. It further acknowledges that housing is an indispensable pillar of the social state that Europe has enshrined. This attitude of laxity and passivity has led to phenomena such as increased social inequalities, the inability to retain young people, difficulty integrating immigrants, and an exacerbated competitiveness deficit. To confirm the veracity of this reality, it suffices to consider the sharp decline in the construction of family housing (from 129,651 in 2002 to 10,000 in 2015) and the average number of young adults living with their parents (in the European Union, Portugal is second only to Greece, with 80% of Portuguese young people aged 20 to 28 living with their parents).
The government decided to act with great urgency and, to that end, has implemented a series of measures to (i) encourage supply, (ii) promote public housing, (iii) restore confidence, and (iv) foster youth housing. With these clear objectives, the government is making public properties available for housing (built to rent), promoting affordable housing, facilitating accessible rentals, and encouraging temporary accommodation. It is also providing guarantees for cooperative construction, reducing VAT to 6%, unlocking 25,000 homes from the PRR (Recovery and Resilience Plan), and increasing funding for around 40,000 new housing units.
The government is also making a strong push for deregulation and simplification, addressing one of Portugal's long-standing problems. It is also important to highlight the repeal of several regulations aimed at controlling the market, but which, in reality, hindered its healthy development. This includes the repeal of compulsory renting and the prohibition of short-term rentals. In this context, it is worth noting such relevant measures as the public guarantee for the purchase of properties by young people, tax exemptions for these young people, the viability of affordable rentals for youth, and an Emergency Housing Program for students. An additional 18,000 beds are planned, specifically for students.
In Portugal, there is a very favorable climate and widespread awareness that new construction or rehabilitation should be carried out with respect for the most demanding sustainability standards and procedures. There is growing adherence to ESG principles, now applied to construction. Thus, it makes sense that new construction should involve issues such as the use of sustainable materials, the safeguarding of renewable energy sources, carbon footprint, water optimisation, waste management, and worker training.
It is also crucial to highlight the conviction that it is vital to create conditions for a significant reduction in the tax burden, both for individuals and businesses.
We conclude as we began. In a horizon marked by agonising uncertainty, the new government of Portugal is aiming to free civil society from excessive regulations and constraints, which the housing market in Portugal has endured over the past twenty years.
For further information contact: Luís Nobre Guedes, Nobre Guedes & Associados
