An Opinion on the Portuguese Real Estate Market: A Call for Smarter Governance and Industry Reform
In a recent commentary, a real estate professional offered a perspective on the opportunities and challenges within the Portuguese property market, arguing for the need for more intelligent governance. The author posits that the sector is filled with potential but is currently burdened by unnecessary obstacles. On one hand, opportunities are identified in flexible-use concepts, a growing demand for innovative spaces, and the increasing importance of sustainability. On the other hand, the market is confronted with excessive regulations, inefficient tax policies, and a lack of professionalism that damages its reputation. The author contends that for the market to prosper, both the government and the industry must change their approach.
One of the most significant challenges cited is the extensive bureaucracy involved in construction and property operations. The commentary specifies that the issue lies not with rent controls but with numerous municipal and state regulations that slow down projects, increase their cost, and sometimes render them impractical. These regulations are often introduced without consideration for their practical consequences, leading to higher costs that are ultimately passed on to tenants. Compounding this issue is the 28% tax on rental income, described as a direct penalty on property ownership that contributes to higher rents.
These conditions are presented as the reason for the high number of vacant ground-floor units in Portuguese cities. According to the author, owners, developers, and potential tenants are unable to implement new ideas within the existing restrictive framework. At the same time, the commentary expresses a conviction that market opportunities are greater than ever, with an expanding variety of commercial uses in high demand, including guesthouses, serviced apartments, and short-term rentals for business travelers. The author also notes the rising popularity of sports and leisure facilities. Properties designed for flexibility and owners willing to adopt new models are identified as those most likely to benefit from these trends.
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Sustainability is presented as another critical theme. Investments in renewable energy and energy efficiency are described as not only environmentally responsible but also as a guarantee of long-term competitiveness. The author also raises a significant concern about the lack of professionalism in parts of the sector, arguing that while construction is over-regulated, professional conduct is under-regulated. This imbalance is said to undermine trust and contribute to the profession's poor reputation. The commentary calls for stricter standards and supervision.
The author also advocates for the promotion of homeownership as a national priority and suggests that simplifying housing development and rethinking the tax system to provide incentives for renting out properties are necessary steps. The responsibility for reform is placed on both the government and industry professionals themselves, suggesting that unethical practices have led to many of the current restrictive measures. The piece concludes that while Portugal possesses all the ingredients for a successful real estate market—location, demand, creativity, and international interest—unlocking this potential requires smarter governance, fairer taxation, and stronger professional ethics.
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