Chega Proposes Vacant Property Registry and VAT Cut to Tackle Housing Crisis
The political party Chega has formally announced a package of proposed legislative measures aimed at addressing Portugal's housing crisis. Party leader André Ventura detailed the plan, which calls for the creation of a mandatory national registry of vacant properties, the application of sanctions against public entities for holding unused buildings, and a significant reduction in the Value Added Tax (VAT) on construction. The announcement positions the party as a proponent of more forceful state intervention to increase the housing supply, presenting a direct challenge to the government's current strategy.
The specifics of the proposed legislation include the immediate development of a comprehensive and publicly accessible “cadastro de imóveis devolutos” or registry of vacant properties. This registry would apply to both public and private property, with the initial focus on cataloging all buildings owned by the central state, autonomous regions, and municipalities. Ventura argued that without this fundamental data, all other government plans to utilize public assets are purely speculative. The proposal suggests this registry would be the cornerstone of a new data-driven housing policy.
The proposed implementation timeline for the registry would be 12 months from the law's approval. Following its creation, a second legislative measure would come into effect, establishing a time limit for public entities to either renovate, sell, or rent their vacant properties. The proposal suggests a 24-month deadline. Failure to comply would result in the automatic transfer of the property's management to the central state's housing authority, the IHRU. If the IHRU also fails to utilize the property within a subsequent 12-month period, the state itself would be subject to financial penalties, which would be redirected to a national fund for affordable housing.
This legislative proposal directly affects all levels of public administration, from local parishes to central government ministries. It is intended to force a cultural shift away from passive asset management towards active utilization of public patrimony for social good. Furthermore, the proposal includes a motion to reduce the IVA (VAT) on all new residential construction and major renovation projects from the current 23% to a reduced rate of 6%. This change, Ventura claims, would directly lower the final cost of homes for buyers and incentivize developers to start new projects.
To ensure compliance, the proposal outlines a new enforcement mechanism to be managed by an independent oversight body. This body would be responsible for auditing the vacant property registry and imposing the prescribed sanctions. The necessary procedures would involve quarterly reporting from all public entities on the status of their property portfolios. This represents a significant increase in the administrative and compliance burden for the public sector, a point that critics are likely to highlight in parliamentary debate.
The penalties for non-compliance are designed to be stringent. For a municipality that fails to act on a vacant building, the penalty would be the loss of control over that asset. For the central state, the proposed sanction is a direct financial penalty equivalent to 5% of the property's taxable value per year of non-use, payable to the affordable housing fund. This creates a powerful financial disincentive for inaction and is one of the most aggressive measures proposed in the Portuguese political landscape to date.
The reaction from the real estate and construction industry has been cautiously optimistic, particularly regarding the proposed VAT reduction. The Association of Civil Construction and Public Works Industrialists (AICCOPN) has long advocated for such a measure, arguing it would provide a much-needed stimulus to the sector. However, legal professionals have raised questions about the constitutionality of forcing the transfer of municipal property to the state, suggesting it could face legal challenges based on the principle of local government autonomy.
Legal interpretation of the proposed rules suggests a complex implementation process. Constitutional lawyers have pointed out that the autonomy of local government is a protected principle, and any law that allows for the automatic transfer of municipal assets could be contested at the Constitutional Court. The proposal attempts to navigate this by framing it as a response to a national social emergency, but its legal viability remains a subject of intense debate among legal scholars.
The government's rationale for its own, less aggressive policies has been to favor incentives over sanctions. The current administration believes a cooperative approach with municipalities is more effective. Chega's proposal, in contrast, is based on the objective of using punitive measures to force action, reflecting a different political philosophy on how to resolve the crisis. The party argues that years of incentive-based policies have failed to produce meaningful results and that a more drastic approach is now required.
Should this legislation be considered, it could be followed by related regulations. For instance, a similar registry and sanction system could eventually be extended to private owners of multiple vacant properties, a policy that has been implemented in other European cities. The debate over these proposals is expected to influence the broader legislative agenda on housing for the remainder of the parliamentary session.
For citizens and investors, resources to understand compliance would be made available through the new oversight body. The proposal stipulates the creation of a public portal where the status of any public building could be tracked. This push for transparency is a central element of the proposed law, aiming to empower citizens to hold public entities accountable for the management of their assets. Navigate Portuguese property regulations with expert guidance at realestate-lisbon.com.
