“This issue has taken years to worsen, and it will take a few years to resolve, but changes won’t happen overnight. However, I believe that by the end of next year, we will start to notice differences in house prices and rental rates,” stated Castro Almeida on the sidelines of the Millennium Talks COTEC Innovation Summit, held today at the Lisbon International Fair (FIL).
Speaking to journalists, the official described the housing crisis as a “huge problem”, asserting that the government “is responding with an unprecedented set of measures.”
Manuel Castro Almeida anticipates that proposals such as increasing the availability of land through the land law, reducing VAT on construction, and lowering income tax for those renting out properties, along with “the number of houses the state will construct,” should encourage this price decrease.
Castro Almeida further noted that the government, with support from the European Investment Bank (EIB), will establish a line to help municipalities create plots for individuals to build their homes.
Prime Minister Luís Montenegro announced on September 26 that the government will lower the VAT rate to 6% for the construction of homes for sale up to 648,000 euros or, if for rent, with rents up to 2,300 euros (moderate rent) – a fiscal regime set to remain in effect until 2029.
Additionally, the minimum VAT rate of 6% will also apply “to the construction and rehabilitation of buildings” for rentals up to the value of 2,300 euros.
The Northern Portugal Association of Tenants and Condo Owners (AICNP) criticized the government’s proposed housing measures today, stating that they “accelerated the crisis” and contribute to “further deregulating the market.”
The housing price index increased by 17.2% in the second quarter, accelerating 0.9 percentage points compared to the previous three months, with transactions exceeding 10 billion euros, the National Statistics Institute (INE) reported today.
According to INE, prices for existing homes rose 18.3% and new homes 14.5% between April and June.
Compared to the previous three months, the Housing Price Index (IPHab) increased by 4.7%, compared to 4.8% in the preceding quarter, with existing homes seeing a 5.1% increase and new homes a 3.8% rise.
