Prime Minister Addresses Housing Policy, Cites Need for 'Equality of Opportunity'
Prime Minister Luís Montenegro acknowledged that recent government housing measures have led to 'a lot of confusion' but defended the policy's objectives during a speech in Aveiro. The policy in question involves a reduced 6% VAT rate for construction projects that fall within specific price limits.
The policy's objective, as outlined by the Prime Minister, is to promote 'equality of opportunity' for residents in high-pressure urban areas, specifically mentioning Lisbon and Porto. The government-approved measure sets maximum price caps for properties to be eligible for the tax incentive: up to €648,000 for homes intended for sale and up to €2,300 per month for rental properties. Montenegro stated, 'I know this is causing a lot of confusion, and I think it's very good that from confusion comes clarification.'
The implementation strategy is designed to address housing affordability challenges that affect essential workers in major metropolitan areas. Montenegro questioned, '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 essential working people... who are constrained by the inaccessibility of the rental market?' He connected the high cost of housing to shortages of professionals such as doctors, teachers, and police officers in these regions.
Need Expert Guidance?
Get personalized insights from verified real estate professionals, lawyers, architects, and more.
The government's rationale is to stimulate the construction of housing that is accessible to the middle class, thereby helping to retain key personnel in urban centers. 'In Lisbon and Porto, everyone must also have opportunities. And this is what we are doing,' Montenegro affirmed. He emphasized that this initiative is part of a broader strategy that does not exclude social policies aimed at supporting the most vulnerable populations.
The budget allocation and funding mechanisms for this VAT reduction are part of the government's broader fiscal planning. The policy is intended to have a direct economic and social impact by increasing the supply of mid-market housing. The Prime Minister's comments serve as a clarification of the government's housing agenda and its focus on addressing market imbalances in specific geographic areas of the country.
Understand policy impacts on your Portugal property plans at realestate-lisbon.com.