The Government of Portugal, chaired by the socialist António Costa, announced yesterday a crash plan to curb the cost of housing, which shot up 20% last year, especially in Lisbon and Porto. The plan will have a budget of 900 million euros, in addition to an additional investment to build 26,000 public houses by 2026. Among the measures planned is the prohibition of granting new licenses for tourist apartments and the elimination of golden visas for foreigners who invest.
To increase housing construction, the Government will change the classification of plots and buildings and will assign land to build affordable housing. The plan eliminates the previous municipal license, so that the promoter can obtain it by presenting a declaration of responsibility. It will also fine public entities that do not meet the legal deadlines for granting licenses.
The Executive wants to increase the availability of apartments for rent giving more confidence to the owners to rent their properties. Thus, it offers to rent homes at market prices for five years to sublet them, thus assuming the risk of non-payment. For current rents, when there is more than three months of non-payment, the State will assume the payment of the rent, it will try to solve the situation of the tenant if there is a social problem or it will take care of the eviction.
The Government of António Costa wants to buy housing to increase the public park (only 2% of the total) and will exempt those who sell to the State or municipalities from paying capital gains tax. In addition, it will enable a line of credit of 150 million euros for municipalities to finance works on flats in poor condition that allow them to be rented.
He also wants to reduce tourist floors: he prohibits issuing new licenses except in rural areas; it will review the current ones in 2030; it creates an extraordinary rate for these owners and will give tax benefits until 2024 for those who transfer their homes to residential rental.
The plan provides for forcing owners to rent houses that have been unoccupied for more than a year (about 730,000). Likewise, it will stop granting golden visas and those already granted will only be renewed if the real estate investment is dedicated to permanent housing for the investor or if it is rented. The plan will also limit the rental price for new contracts and will limit its rise this year to 2%.
The executive will force banks to offer mortgages at a fixed rate; it will give aid of up to 720 euros/year to compensate for the rise in rates, and subsidies of up to 200 euros/month so that the effort rate does not exceed 35% of income in modest families.
