Portugal's New 'Build Portugal' Rental Package Launched Amidst Suspension of Official Statistics
The Portuguese Government has officially approved a new package of housing measures titled “Construir Portugal – Arrendamento e Simplificação,” aimed at stimulating the rental market and simplifying construction processes. The announcement, however, is overshadowed by a critical data blackout, as the National Statistics Institute (INE) has confirmed the suspension of its detailed local rent statistics until March 2026, creating a challenging environment for assessing the policy's impact.
The primary objective of the “Build Portugal” initiative is to address the ongoing housing affordability crisis by increasing the supply of rental properties and curbing speculative pressures. The policy introduces a multi-faceted approach, including significant fiscal incentives and regulatory changes. Among the key measures is a proposed reduction in the Value Added Tax (VAT) for construction and renovation projects specifically designated for the affordable rental market, a move intended to lower development costs and encourage private investment in this sector. Another central pillar of the package is the creation of tax benefits for landlords who voluntarily enter into affordable rent contracts, offering them a more favorable fiscal regime in exchange for below-market rental prices. In a move to temper foreign demand, the package also includes a proposed hike in the Property Transfer Tax (IMT) for non-resident buyers, though the specific percentage increase has yet to be finalized.
The implementation of this package will occur in what is being described as a period of “statistical blindness.” The INE’s decision to halt the publication of its “Estatísticas das Rendas da Habitação ao Nível Local” removes the only official, granular source of data on rental values and contract volumes across Portugal’s municipalities. According to a statement reported by Diário de Notícias, the suspension is necessary to allow the INE to integrate new, more comprehensive data from the Autoridade Tributária (Tax Authority). This new data stream will include information from rental contracts declared by tenants, which will help capture a more accurate picture of the market by including previously undeclared agreements. While the long-term goal is to produce more robust statistics, the immediate consequence is a nearly two-year gap in official market intelligence.
Need Expert Guidance?
Get personalized insights from verified real estate professionals, lawyers, architects, and more.
This data vacuum complicates the government's ability to monitor the effectiveness of its own policies in real-time. Housing Minister Patrícia Gonçalves Costa stated in a press conference that the government will rely on “alternative indicators and close collaboration with industry stakeholders” to track market developments during this period. “We are confident that the measures are correctly targeted to address the supply-side constraints in our housing market. The structural changes we are making, particularly the incentives for affordable rentals, are designed to have a lasting positive impact, which will become evident even without the immediate availability of granular statistics,” she commented. However, economists have expressed concern. Dr. Ricardo Borges, a housing market analyst at the University of Lisbon, noted, “Policy without measurement is a leap of faith. While the intent of the ‘Build Portugal’ package is commendable, the inability to quantify its effects on rental prices month-to-month will make it difficult to fine-tune the approach or respond to unintended consequences.”
The last official data from the INE, corresponding to the first quarter of 2025, highlighted the urgency of the situation. It revealed a nationwide average rent increase of 10% compared to the previous year. The capital, Lisbon, was identified as the epicenter of this trend, with average rental values in prime areas climbing to €16 per square meter. This price escalation has been a significant driver of the public call for government intervention. The new measures are a direct response to these figures, but their success in reversing or stabilizing this trend will now be a matter of qualitative assessment and anecdotal evidence until 2026. The government has indicated that it will proceed with the legislative process to enact the new measures before the end of the year, with the aim of having them in force by early 2026. The full details of the VAT reduction and the IMT increase are expected to be detailed in the upcoming state budget proposal. Understand policy impacts on your Portugal property plans at realestate-lisbon.com.