Portugal's Government Takes Action to Combat Housing Crisis

Portugal's Government Takes Action to Combat Housing Crisis

Matilde Silva
1 min read

Portugal's New Housing Initiatives Aim to Alleviate Crisis

In response to the country's housing shortage, the Portuguese government has unveiled plans to combat the crisis. This includes the reduction of the value-added tax (VAT) rate for homebuilding to 6% and the allocation of more rural land for affordable housing developments. The government further intends to encourage developers to construct rental properties and sell state-owned properties to boost housing supply. These measures are aimed at addressing the housing crisis and providing relief to frustrated citizens in one of Western Europe's poorest countries.

Key Takeaways

  • Portugal to reduce VAT for new homebuilding to 6%
  • Government to offer state-owned properties for sale
  • Incentives for developers to build affordable homes to rent
  • More rural land will be available for housing development
  • Measures aim to alleviate housing crisis in Portugal


The Portuguese government's comprehensive approach to tackling the housing crisis through VAT reduction, incentive programs, and property sales is expected to increase housing supply and mitigate discontent among citizens. This strategy may also attract interest and investment from Western European countries and developers. However, potential downsides include heightened competition for rural land and the risk of gentrification. Over time, these measures have the potential to enhance Portugal's real estate market, fostering economic growth and housing stability.

Did You Know?

  • Value-Added Tax (VAT) rate reduction for homebuilding to 6%: The decision to lower the VAT rate aims to stimulate construction activity and make homebuilding more affordable, ultimately addressing the housing crisis.
  • Incentives for developers to build affordable homes to rent: By offering incentives, the government hopes to increase the availability of affordable rental housing options, thus alleviating the housing crisis.
  • Government to offer state-owned properties for sale: Selling state-owned properties is aimed at increasing housing supply and promoting affordable housing, providing a potential solution to the housing crisis.

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