Portugal’s government is gearing up to approve sweeping changes to promote the national housing market during a Council of Ministers’ meeting tomorrow (Thursday).
According to Expresso newspaper, citing a government source, measures on the table will be serving to stimulate, through tax incentives, the placing on the national rental market of properties that up to now have been destined for ‘Alojamento Local’ (short-term holiday lets) and empty properties.
The aim is to support citizens in the rental market, particularly families and young people who suffered a drop in income whether through unemployment, illness, even divorce.
Says Expresso, the government is still analysing a support package for mortgage payments (only 8.8% of low-income households have mortgages; the vast majority are rent-payers).
In the case of homeowners who have seen mortgage payments increase by €200, €300, €400 a month, prime minister António Costa has stressed that banks are obliged to renegotiate contracts – something consumer watchdog DECO has suggested is not always happening.
Thursday is likely to see the “new permanent mechanism for rental support for families with income falls”; and tax incentives announced for the construction and/or rehabilitation of residential properties in order to “increase access to affordable rentals”.
Says Expresso, the construction and real estate sector was due to meet with the government “two days before the Council of Ministers”, and both want the executive to go even further, “creating mechanisms that allow municipalities to accelerate licensing processes for new housing projects”.
As the paper explains, “every year of delay to obtain a licence in Lisbon, for example, adds another €500 per square metre on the final price of the property”.
The sector defends the end of the additional IMI rates (for high-end properties), as well as a reduction in IVA (VAT) in the construction of new homes for middle-income brackets.
Expresso’s focus on housing comes in a week when the scarcity of affordable accommodation has really come to the fore.
‘When home is reduced to a room’ is another headline in the paper, describing the difficulties faced by young people trying to find a place to live in towns and cities where the price of rents and homes has become “unsupportable”.
For now, the paper adds, the housing ministry has only spent 3% of RRP funding from Brussels available to power the housing sector. Its pledge is to build and rehabilitate 26,000 homes – 5,000 of which destined for affordable rentals – by 2026, albeit the construction confederation suggests the likelihood of this happening as being “highly improbable”.