The proposal to reduce the VAT on construction to the minimum rate of 6% finds broad agreement, albeit with different specifics among political parties. Several parties are also advocating for changes or the abolition of land laws.
AD (PSD/CDS-PP)
The coalition of PSD and CDS-PP advocates for public-private partnerships to construct and rehabilitate affordable housing and student lodging. They emphasize that public intervention should focus on assisting tenants in need, rather than broadly penalizing property owners. They propose a minimum 6% VAT on construction and rehabilitation works, seek to “flexibilize land occupation limitations,” and wish to create an exceptional and temporary regime to cut or eliminate tax costs on permanent housing projects.
The AD suggests a near “automatic market injection” of vacant or underutilized state-owned houses and lands. In the rental market, the coalition supports long-term contracts with rent update formulas accessible to investors and private property owners and calls for reviewing and expediting mechanisms for resolving contract disputes.
PS
The PS proposes expanding the public housing stock through the “Revive Habitação” program, utilizing the State’s vacant properties. For middle-class individuals, young people, workers, and displaced students, the proposals include financing public housing construction, partially supported by dividends from Caixa Geral de Depósitos.
In addition to establishing a Construction Code, the PS suggests a minimum 6% VAT for price-controlled projects and tax exemptions for affordable rents. They aim to standardize access to rent support and extend its reach to more people, including the middle class. For property purchases, they propose working with the Bank of Portugal to explore mechanisms that protect families from default on mortgage payments.
Chega
Chega advocates for simplifying evictions for contract defaults and calls for a “zero-tolerance policy on illegal occupations.” Their proposals include revising rent laws to end rent freezes and promoting long-term rentals with tax incentives for landlords. The party opposes rental market price control measures, arguing that they deter investors and reduce supply.
In terms of construction, Chega seeks faster licensing processes and the creation of a credit line for building homes for young people and low-income families. They also support opening public tenders for private companies interested in developing housing projects on state-owned lands for affordable housing.
Iniciativa Liberal
The short-term strategy of the Iniciativa Liberal involves bringing vacant and closed houses into the rental market and revising the rent tax. In the long-term, the party proposes tax incentives for housing construction and rehabilitation. Their plans include the establishment of a construction code, increasing available land for building, and creating a pre-licensing and automatic urban regime.
Led by Rui Rocha, the party also favors unfreezing rents to “restore landlord confidence” through establishing a Unified Rental Code and proposes that municipalities be allowed to set a discount rate on the Property Transfer Tax (IMT).
Bloco de Esquerda
Bloco de Esquerda maintains its 2024 program and, in addition to rent control by setting maximum values based on location, proposes lowering interest rates from Caixa Geral de Depósitos. The party argues that 25% of all new constructions should be for affordable housing and advocates using the State’s vacant buildings for that purpose. They propose “administratively seizing vacant residential buildings for conversion into housing.”
On the fiscal front, several proposals include extending the Municipal Property Tax exemption to 8 years for homes valued up to 125,000 euros, reducing municipal purchase taxes by 50%, and eliminating tax benefits for real estate investment funds. For rental support, the Bloco suggests including the security deposit value in the Porta 65 program.
PCP
The PCP holds its stance from last year’s electoral program, continuing to advocate for increasing public housing with the construction of 50,000 homes and creating a simplified regime for the State to administratively seize vacant homes. Addressing rentals, they prioritize creating a special regime to protect tenants by capping rent values, repealing the “eviction law,” and amending controlled rent systems.
The PCP proposes limiting real estate funds from buying homes and stopping local accommodation in areas lacking housing. For property purchases, they support public bank intervention and a special protection regime using banking profits to offset interest rate hikes.
Livre
Livre proposes the repeal of the Land Law, termination of golden visas, and a ban on non-resident purchases of holiday homes for five years. Their plans include establishing a National Housing Service, aiming for 10% public housing by 2040, with the construction of nearly 60,000 homes, and a “Public Housing Policy Fund” with an annual budget of 1 billion euros.
In extraordinary rent support, Livre focuses on reducing the reference effort rate to 30% from the current 35% and increasing the maximum support amount to 300 euros. Another rental proposal is imposing maximum rent limits for at least five years on properties owned by state-funded landlords. Regarding property purchases, they propose public financing to cover up to 30% of the property’s market value as an equity loan.
