With the problem of access to housing taking on major proportions in the country, the government yesterday came up with a €900 million package of measures to try to ease the growing difficulties of the Portuguese to rent or to guarantee the payment of the house loan , to soften. In a package with more direct (and limited) support for rent or interest payments and tax benefits for landlords, there are also more unexpected measures such as the end of municipal licensing or a regime of “compulsory rental” of vacant homes.
António Costa, who presented the plan in Palácio da Ajuda, flanked by the Minister of Housing, Marina Gonçalves, and by the Minister of Finance, Fernando Medina, called them “disruptive measures”. The opposition saved other adjectives for the Prime Minister’s program, with the PSD talks about “statistical” measures, Chega a “deceleration model” and the Liberal Initiative an “unsustainable aggression” against private property”. On the left, the PCP referred to the government program as a series of “tax exemptions for large property owners”.. For the BE it is also a matter of a “transfer of income to banks and real estate interests”. The program presented by António Costa, entitled “More housing”, is now entering public consultation for a period of one month and will return to the Council of Ministers for final approval on March 16. But most of the measures are subject to parliamentary approval as they are matters within the remit of the Assembly of the Republic.
Rental support and return of interest subsidy
Divided into five strategic axes, the Executive’s plan proposes to increase the number of properties earmarked for residential use; simplifying the permitting processes for construction, acquisition and use of housing; increasing the supply of housing for rental properties; fight speculation; and support families.
The most direct support for tenants and mortgage holders fits into this last axis. According to António Costa yesterday, the government will subsidize interest on housing loans up to 200,000 euros for households taxed up to the sixth step of the IRS (taxable income up to 38,632 euros) and which have registered an increase that exceeds the stress tests performed when entering into the loan – the grant will be 50% on the amount “which is above the maximum value” recorded in the tests. A temporary measure limited to a maximum payment of 720 euros. It also provides for the obligation for banks to offer fixed-interest loans to customers.. And the capital gains exemption for the amortization of home loans for the owner or descendants – until now capital gains have not been subject to tax as long as they are used within a three-year period to acquire a home, which becomes renewable until the purchase of the children’s home.
Also in this chapter, but with regard to renting, the possibility is created of a monthly contribution up to a maximum of 200 euros, when tenants have an “effort percentage greater than 35%”. and the rent for the house falls within the values set by the IHRU for the municipality in question and for households with an income up to the sixth rung of the IRS (the same 38,632 euros).
The state pays rent to defaulting tenants
The third line of action, which aims to increase the number of houses on the rental market, lists some of the most emblematic measures – and most controversial – of the package presented by the government yesterday. Starting with the fact that the State replaces the landlords when evicting tenants who do not pay rent for three months. In these circumstances, the State guarantees the payment of rent to the landlord and the subsequent eviction – if applicable – of the tenant. That is, if the reasons for non-compliance with rent payments are related to a “socially acceptable” reason, the tenant can be supported or even moved. Otherwise it will be expelled by the state. A measure that António Costa justified with the need to give confidence to landlords, while emphasizing that “the rate of non-compliance with rent payments is extremely small”.
In addition to this measure, and with the same objective of putting more houses on the market, the government proposes to “let houses” to owners “at normal prices, for a period of five years” and pay one year’s rent in advance, after which the sublease at affordable rents. On the same axis, there is also a capital gains tax exemption for those who sell real estate to the state or municipalities.
Another measure that promises controversy is the creation of a regime of “compulsory rental” of vacant housing, whereby the municipalities pay the “owner the rent due”.and will then sublet at affordable rates.
End of new AL licenses
As part of the package of measures for housing, the cabinet will also prohibit the issuance of new local housing permits, a generalized measure with the exception of a number of municipalities in the interior.
Current permits will be reviewed in 2030 and every five years thereafter. The Local Accommodation sector will still be subject to an extraordinary contribution that returns to the IHRU (Institute for Housing and Urban Rehabilitation), in support of housing policy. On the other hand, local property owners who transfer real estate to traditional leasing will benefit from a zero tax on real estate income until 2030.
Decisions that have already been challenged by the industry, which claims that “all these measures will not only create huge uncertainty in the face of private investment, but will also make it unfeasible”. complain about “Government Persecution”ALEP – Associação do Alojamento Local in Portugal claims that this sector is “used as a scapegoat” when it is “the least of the government’s problems related to housing”.
Licensing Revolution
There is a real revolution going on with regard to the simplification of permit granting: architectural projects are no longer subject to a municipal permit. Instead of, the chambers proceed to issue the permit on the basis of a term of responsibility of the designers. Costa called it a “major innovation” and promised a “very strict framework of sanctions” for those who do not respect the standards. With the same aim of accelerating the projects, the prime minister also argued that, in cases where the processes involve consultation with central government authorities, they will be an “effective financial sanction when they do not respect the deadlines set by law.
Other measures of the ‘More housing’ plan
Limited rent increase for new contracts
António Costa defended that it is time to create mechanisms to limit the increase in rents in new contracts, which will be capped depending on previous years’ inflation and the medium-term inflation target of the ECB (European Central Bank ). .
Autonomous IRS rate at low rents
The autonomous income tax rate on rents will be reduced from 28% to 25%. The IRS rate applied to contracts with terms between five and ten years drops from the current 23% to 15%, in the case of contracts between 10 and 20 years, it drops from 14% to 10%. For contracts with a term of more than 20 years, the tax rate drops from 10% to 5%.
Force works in empty houses
There will be a credit line of 150 million euros, aimed at municipalities, so that they can carry out forced labor in vacant homes.
Land for trade and services can become housing
Land or properties approved for trade and services will be able to be used for construction or converted into housing without changing land use plans or permits.
End of golden visas
The awarding of Gold visas, in its various forms, will be terminated. As for those already granted, “there will only be scope for renewal if they are the owner’s own and permanent residence or descendant, or if the property is placed on the rental market for a long period of time”.
Source: DN
