Building Portugal: Strategies to tackle the housing crisis

Last Friday marked a significant milestone in Portugal's approach to its current housing crisis. The Prime Minister, Luís Montenegro, presented the ambitious "Construir Portugal: Nova Estratégia para a Habitação" programme, which sets out a comprehensive plan to revitalise the housing sector through a series of impactful measures.


Overview of the new housing strategy

The new housing strategy is based on five fundamental pillars:

  • Encouraging supply: Introducing measures to stimulate the construction and rehabilitation of housing.
  • Promoting public housing: Prioritising the availability and development of public housing to meet the needs of the community.
  • Restoring trust: Reformulation of regulations to restore trust between landlords and tenants.
  • Youth-centred initiatives: Addressing the specific housing needs of young people, including affordable student housing.
  • Ensuring accessibility: Allowing wider access to housing through various support mechanisms.


Main measures and their impact

The government has introduced 30 specific measures, with implementation deadlines ranging from ten days to four months. The main highlights include:

  • VAT rate reduction: Reduction of VAT to a minimum of 6% on housing rehabilitation and construction work, which could significantly reduce the costs associated with the development of new housing projects.
  • Use of Public Buildings: Implementation of a semi-automatic regime for the use of vacant or underused public buildings and making public buildings available for affordable housing projects.
  • Promoting the use of rural land: Amending the Land Law to allow the use of rustic land for sustainable housing solutions, thus extending the scope of development to rural areas.
  • Housing initiatives for young people: Introduce public guarantees for young people to enable bank financing, along with exemptions from IMT and IS (Stamp Duty).


Dialogue and implementation

The Prime Minister underlined the government's openness to dialogue with all interested parties willing to contribute to building a robust property market. However, he firmly stated that this openness does not extend to mere simulations of dialogue, stressing the government's commitment to real, actionable solutions.


Strategic Objectives

The Minister for Infrastructure and Housing, Miguel Pinto Luz, stressed that these measures aim to make housing a central pillar of the welfare state, responding to the urgent need for affordable housing and revitalising urban areas. The strategy aims not only to provide immediate relief, but also to establish a sustainable framework for the future of housing in Portugal.



The "Building Portugal" plan represents a bold step forward in tackling the multifaceted issues facing Portugal's housing market. By focusing on a combination of immediate actions and long-term strategies, the government hopes to foster an environment in which quality housing is accessible to all, stimulating economic growth and improving the quality of life throughout the country.

For investors, property developers and future owners, these changes open up new opportunities and challenges. It's an exciting time to be involved in the Portuguese property market, and staying informed will be key to navigating this evolving landscape.

For more information and updates on how these developments could affect your property decisions, stay tuned to our blog or contact our experts at Invest 351.

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