Government measures to tackle the housing crisis The Council of Ministers approved this Thursday a “More Housing” package of legislation with measures aimed at stimulating the rental market, as well as streamlining and encouraging construction.

The Council of Ministers approved this Thursday the “More Housing” package of legislation with measures aimed at stimulating the rental market, as well as streamlining and encouraging construction.

Among the measures announced by António Costa are the provision of land and buildings that are classified as commercial or service, so that they can also be used for housing; creating affordable housing; innovations in the housing licensing process, or protection of landlords by paying rent to tenants who have been in default for three months.

Government to stop issuing golden visas

As part of measures to combat real estate speculation, the government will no longer issue golden visas.

“As for the golden visas already issued, (…) they will only be renewed if they are the permanent residence of the owner and his descendant, or if the property is put on the rental market for a long term,” – the message says. prime minister minister.

Government to limit rent increases for new landlords

The cost of rent under new lease agreements will now have criteria limiting its increase.

“For new contracts, the new rent must be derived from the amount of the last rent, with updates that may have been made during the term of the contract,” the prime minister explained.

In addition to these two criteria, the value of the new rent may also take into account the 2% inflation target set by the European Central Bank (ECB).

Government bans new local hosting licenses

The issuance of new local occupancy licenses “will be prohibited”, except for rural housing in municipalities in the interior of the country, where they can stimulate the local economy.

The prime minister also announced that current licenses for local residences “will be subject to re-evaluation in 2030” and periodically thereafter, every five years.

Thus, the current licenses remain valid until 2030, which means “seven years of guarantee for those who have invested,” António Costa stressed.

The ban on new licenses for local housing will not extend to “a strip of municipalities in the interior of the country where there is no urban pressure and where local housing can boost the economy,” António Costa explained.

Also at the meeting, in response to reporters, Housing Minister Marina Gonçalves said she could not set a “specific date” for the suspension of new licenses, but added that it would be retroactive to the date the measure was finally approved by the Assembly of the Republic.

Properties that remain in local housing will pay a special fee.

Property left in local housing will be asked to pay a special fee.

“We will create an emergency contribution on all properties that remain in local housing,” the prime minister said, noting that the income will be sent to the IRHU (Institute for Housing and Urban Rehabilitation) to fund housing policy.

The measure also aims to encourage people to contribute to the negative externalities that local accommodation creates from those who benefit from the activity.

Homes leaving local housing by 2024 do not pay rent to the IRS until 2030.

Owners who move their homes out of local housing by the end of 2024 and put them on the rental housing market will be exempt from the IRS on rent until 2030.

“We are going to allow all those who have apartments in local housing and rent them out, until the end of 2030, zero IRS tax exemption,” the prime minister said.

The government will simplify municipal licensing and punish for the delay in issuing conclusions

Architectural designs will now only be licensed based on the term of responsibility of the designers, and public authorities will be penalized for delays in issuing opinions.

The prime minister explained that architectural designs and special projects are “no longer subject to municipal licensing” and the chambers issue licenses based on “a liability term signed by the designers”.

Banks will now have to offer fixed rate mortgages.

Banks will now be required to offer fixed rate offers in their mortgage portfolio.

“All banks must offer fixed rate loans in their portfolio, in home loans,” the prime minister said, making it clear that with this measure, financial institutions will no longer be able, as they currently are, not to provide this offer.

Government approves credit line for municipalities to renovate vacant houses

The government also announced a line of credit intended for municipalities to carry out work in vacant houses.

The measure provides for 150 million euros to finance a credit line to municipalities to carry out “forced labor in vacant houses and poor living conditions,” Prime Minister António Costa said.

This funding of municipalities by the state is not new, but municipalities “rarely” resort to the current model, he stressed.

The standalone IRS rent rate will drop from 28% to 25%.

The stand-alone rate currently charged on rental income has been set at 28% for a few years – when the landlord doesn’t want to include income – and there are situations where this rate can be lowered depending on the length of the contract.

Land and commercial and service facilities can be used for housing without changing the license

Land or property permitted for trade and services could be used for construction or converted into housing without changing land-use plans or licenses.

In this context, António Costa stressed the possibility that “lands intended for commercial or official use may be used for residential development” and that “property that has been granted a license for commercial or service activities may be converted in housing.”

The government estimates that the housing measures will cost around 900 million euros.

The measures of the Mais Habitação program will cost about 900 million euros, which will be mobilized from the state budget, the finance minister estimated on Thursday.

The Prime Minister stated that these funds will be mobilized from the state budget, eliminating the possibility of their financing through the Recovery and Resilience Plan (PRR).

“PRR money is not some sort of checking account that you get every time you need it. All values ​​in PRR are distributed down to the last cent. (…) This idea that ‘there is a problem, go take it from the PRR’, it is not. This is not a checking account and not a benefit to our parents,” he said.

The government introduces a subsidy for poor families

The government will provide a rent subsidy of up to 200 euros to support families who spend more than 35% of their income on housing, the chief executive said on Thursday.

“We are still determining the best model,” Housing Minister Marina Gonçalves said at a meeting with journalists at the Ajuda Palace.

“The support will not be limited by criteria,” he added, stressing that families with an “effort ratio above 35%” of income are “already identified” and it is important that the response be “simple, flexible and efficient.”

When asked about the subsidy limits, Marina Gonçalves indicated that they would be equivalent to the current tables for other rental support.

Families who sell houses to pay off their mortgage with no capital gains

At stake, the finance minister explained, is tax-free capital gains “from the sale of the owner’s real estate” and which “is applied to amortize the first mortgage,” that and descendants.

The state undertakes to pay rent for three months of delay

The state will replace the tenant and pay the rent within three months to strengthen the rental market. This measure was announced at a press conference after the meeting of the Council of Ministers.

“We know that the rate of rent non-compliance is extremely low. However, we know that there is a fear in Portuguese society and in particular among many landlords that “a default may occur” and that they will never again act or be Slowly advancing the charge,” said the Prime Minister.

In this context, he added that the government will make an amendment “so that all eviction requests that are filed with the national department and rent, after three months of non-compliance” can be paid by the state, that is, “the state will immediately replace the payment of rent due to the tenant to the landlord.”

On the other hand, the state will remain in the position of landlord to collect unpaid rent, and if there is a “socially acceptable reason” to justify non-compliance, it will assume that role by maintaining rent payment or moving forward with a resettlement measure.

In the case of a “professional non-payer”, the state will carry out the eviction, the prime minister explained.

Government creates subsidies for families to face rising home loan interest rates

The state will subsidize a 50% interest rate on housing loans up to 200,000 euros for families whose growth exceeds the “stress” test, in the case of families that receive up to 38,632 euros per year.

The Prime Minister explained that with regard to credit protection, “this support is provided for loans up to 200 thousand euros from households that are taxed up to the sixth step of the IRS. [com rendimentos coletáveis até 38.632 euros] and when the state will subsidize interest at a rate of 50% of the cost in excess of the maximum cost to which the unit was subjected during the “stress” test that it carried out when hiring.

António Costa stressed that in recent years, banks had to conduct a “stress test” when concluding loan agreements in order to assess the solvency of the family and check the level of their own efforts.

In practice, households use these simulations to predict the impact on family income, and hence the payment to the bank, in a scenario where the interest rate rises X times above the index.

“Whenever the interest rate rises above the maximum value that it was subjected to in “stress,” there is an unforeseen effort for the family compared to what its effort rate was, and the state will subsidize this increase by 50%,” he guaranteed.

This measure will be temporary and the amount of support is limited to 1.5 ms, that is, up to 720.65 euros.

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