The government will not impose any brakes on the update of rental prices in 2024, which under current legislation will be increased in line with inflation. But the Council of Ministers has approved the strengthening of support for tenants as a way to mitigate the increase, which will amount to 6.94%. The Lisbon Tenants’ Association speaks of “limited and short-term support, especially for the poorest families”. On the other hand, the National Association of Owners congratulates “the government for complying with the law”, while the Lisbon Association congratulates itself on “the common sense” not to limit the update, a measure that, in connection with the legislative Housing policy reform package would mean “the total collapse of the rental market” in Portugal.
Therefore, and in order to soften the increase in rents – which will amount to almost 50 euros for a rent of 700 euros and more than 60 euros for a rent of 900 euros – the government has chosen to automatically increase the extraordinary income by 4.94 % increase. aid and this reinforcement will be granted even if this entails exceeding the current limit of the aid granted, namely EUR 200.
And tenants who do not currently benefit from special rental subsidy, but now have an effort percentage where this part of their monthly costs is above 35%, can apply for this support, as long as they have a contract before March 15, 2023 and have a higher income. up to the sixth tax bracket. According to Executive figures, approximately 186,000 households are eligible for this monthly subsidy, a measure included in the More Housing package.
The government has also decided to increase the value of income that is deductible at the tax authorities from the current 502 to 550 euros in 2024. This is a universal measure that covers all tenants.
António Machado, general secretary of the Tenants Association of Lisbon, emphasizes that the increase in support will be lower than the rental price update, “which means that tenants will have to transfer a greater share of their liquidity to landlords.” Moreover, he said, “more attention should have been paid to the poorest families, who are exempt from reporting their income.” For this, he says, support must be made available to everyone whose income represents an effort rate of more than 25%.
António Frias Marques, president of the National Association of Property Owners, guarantees that the brake imposed by the government on the increase in rental prices in 2023 (they rose only by 2% instead of the 5.43% of inflation) had intended the opposite effect: “raising rents even further, with landlords resisting the renewal of contracts”.
The brake caused “insecurity and mistrust” among owners, a situation that “will take decades to repair.” This person also remembers that only 2% of the rental prices are above a thousand euros and that in more than 80,000 contracts the rental prices are below 50 euros. And he adds: “Whether or not to increase the rent is a prerogative of the landlord. They do not apply this when rents are high. If the tenant complies, the landlord does not want him to leave,” he assures.
Luís Menezes Leitão, from the Lisbon Owners’ Association, spoke last year of a “completely clumsy intervention” and recalled that in the almost forty years that the legislation in question has been in place “there have already been higher inflations and the issue has never arisen.” has occurred. “. According to this official, “we cannot live in a country where laws should not be obeyed”.
The Minister of Finance, who yesterday heard in the House of Representatives about the proposed National Budget for 2024, said that for the majority of tenants the increase will be 2% next year. “What has been determined for the large part of Portuguese families is that the rent increase will be 2%,” said Fernando Medina in response to the Bloco de Esquerda, which criticized the government’s option not to maintain the rent brake in 2024 .
Ilídia Pinto is a journalist for Dinheiro Vivo
Source: DN
