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Government Announces “Accessible Renting” Program

The government has proposed, within the framework of the New Generation of Housing Policies (NGPH), a package of measures aimed at ending housing shortages in Portugal within 6 years. A program which, according to Matos Fernandes, Minister of the Environment, intends to create another 100,000 affordable rental properties.

1. To this end, this package complements the Accessible Renting Program for minimum contracts of 3 years and, in the case of leasing to young people, a minimum of 9 months (school year). Under this program the landlords will be:

a. Exempt from property income taxes (IRS and IRC)

b. The possibility of contracting a subsidised loan for the purchase, construction or rehabilitation of a property

c. They will benefit from a reduction in IMI that can lead to the exemption of this tax

d. They will have income insurance that will be obligatory and will compensate in case the tenant fails to pay.

In turn, the rent has to be calculated 20% below market prices (INE reference values). The affordable lease program is for families whose incomes are insufficient but too high to benefit from the “1º Direito” Program. That is, revenues equal to or higher than 35% of the family income.

1. To allow stability in the market and to promote long-term rentals (regardless of rent amount) - the implementation of tax benefits for owners who rent for more than ten years - a reduction of the tax burden by 14%; and 20 years - a reduction of the tax burden by 18%.

2. In the new legislative package, the 1º Direito - Support Program for Access to Housing is for families with an income under € 1700 per month and who do not have their own house in the council they wish.

3. Another measure included is related to adults over 65 and disabled people who will have permanent contracts when they have lived in the property for more than 25 years.

Casas do Barlavento considers this program undeniably essential and positive to guarantee all people adequate housing. However, one has to wait to see how the plan will unfold during its application.