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Construction Insights July 2025: Portugal

09 July 2025
Luís Nobre Guedes from our association firm, Nobre Guedes & Associados, discusses how Portugal is tackling its housing crisis with new government measures. 

Portugal is no exception to the general housing crisis that is ravaging the world and Europe in particular. Our article explores Portugal’s new measures in tackling the housing crisis. 

The new government found itself in the position of having to take some measures that were considered urgent and navoidable. Public investment has fallen significantly, and private investment is still insufficient.Thus, Portugal’s government, mainly through EU funds, began by planning to build 26,000 new homes in 2024. With the new government, this construction rate has risen to 59,000 new homes. Even so, experts say that around 120,000 new homes should be built. 

However, some major changes have already been introduced. These changes include the following: 

  • Incentives for the construction and renovation of residential properties. 
  • Public guarantees and credit support programmes for housing, mainly for young people. 
  • Financing programmes and tax incentives to encourage the renovation of old buildings. 
  • Measures to streamline licensing processes. 
  • Substantial reduction, or even elimination, of urbanisation and building use and occupation fees, as well as application of a 6% VAT rate. 
  • Stimulation and facilitation of new housing concepts in Portugal, including Regulatory Sand Box (build to rent, mixed housing with urban density bonuses for moderate-cost housing, co-living, modular housing, housing cooperatives, flexible dual use of student residences). 
  • Repeal of rules such as forced leasing, rent freezes and punitive measures for local accommodation. 
  • Encouraging long-term leasing. 
  • Stimulating the improvement of living conditions and energy efficiency.
  • Public support programmes to ensure access to adequate housing. 

In Portugal, there is a widespread belief that the housing crisis will inevitably be resolved through regulatory stability, legal certainty, predictable tax guarantees and the defence of a stable and secure rental system. The watchword is the urgent need to create conditions for a significant increase in supply and thus reverse the trend of a glaring shortage of housing supply, both for the public and private sectors. 

For further information contact: Luís Nobre Guedes, Nobre Guedes & Associados

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