Montenegro Defends Housing Measures, Citing Need for “Equality of Opportunities” in Lisbon and Porto
Prime Minister Luís Montenegro has publicly addressed the “great confusion” surrounding his government's recently announced housing policy, defending the measures as a crucial step towards ensuring “equality of opportunities” for residents in Portugal’s most expensive urban areas, including Lisbon, Porto, and the Algarve. Speaking at an event in Aveiro, the head of government reiterated the policy's objectives, directly confronting the public debate over the high price ceilings established for tax incentives.
The policy's central aim is to stimulate housing supply through significant tax reductions. Montenegro clarified the two main fiscal incentives: a reduced VAT rate of 6% on new construction for homes sold up to a maximum price of €648,000, and the same reduced VAT for properties built or renovated for the rental market, provided the monthly rent does not exceed €2,300. “I know this is causing a lot of confusion,” the Prime Minister acknowledged, “and I think it's very good that from confusion comes clarification and the adherence of the Portuguese people to a principle of solidarity.”
He argued that the policy specifically targets the affordability crisis that is pushing essential workers out of major cities. “Are there or are there not, in the large urban areas of Lisbon and Porto, also on the Setúbal Peninsula, also in the Algarve... families of working people essential to our community, social, and economic dynamic who are constrained by the inaccessibility of the rental market?” Montenegro questioned. He directly linked the high cost of housing to the critical shortage of doctors, teachers, and police officers in these regions, which in turn impacts the availability of public services like hospital emergency rooms and childcare.
Need Expert Guidance?
Get personalized insights from verified real estate professionals, lawyers, architects, and more.
The government's rationale, as explained by Montenegro, is to create a balanced system of opportunities across the country. “It is necessary to have the courage to tell the country that, on the one hand, outside of Lisbon and Porto, everyone must have opportunities. On the other hand, in Lisbon and Porto, also everyone must have opportunities. And this is what we are doing,” he stated emphatically. This justification positions the policy not as a blanket subsidy but as a targeted intervention to solve a structural problem in specific, high-pressure geographies.
The Prime Minister also sought to allay fears that the government was shifting its focus away from the most socially vulnerable. He assured that the new measures aimed at the middle class would not come at the expense of existing social support programs. “Society does not progress if we only direct ourselves to social policies aimed at bringing in those who are in a situation of vulnerability,” he warned, signaling a dual approach that supports both social welfare and middle-class stability. The government's defense of the policy comes at a critical time, as it seeks to build a consensus to ensure the measures can pass through a fragmented Parliament.
Understand policy impacts on your Portugal property plans at realestate-lisbon.com.