Portuguese government gives latest update on housing crisis countermeasures

Portugal’s Secretary of State for Housing, Patrícia Gonçalves Costa announced several new measures designed to tackle the country’s chronic housing shortage for the middle classes.

Giving an update on the programme Construir Portugal’ (Building Portugal), the secretary of State said announcements would be made on the Construction Code (presented in May 2024) promising the roll out for Building Information Modelling and news on Simplex – a policy aimed at reducing red tape in planning permission.

Building information modeling (BIM) is an approach involving the generation and management of digital representations of the physical and functional characteristics of buildings or other physical assets and facilities. BIM is supported by various tools, processes, technologies and contracts.

Speaking at a Lisbon hotel on Friday, February 14, she said: “The housing problem is complex and requires a multi-disciplinary approach involving all players.

“The root of the problem lies in supply and all efforts should be made to create more supply whether from the point of view of regulation, using properties belonging to the State, public supply development, or financing so that we can attract more types of investors.”

At the event organised by the Vida Imobiliária and the Portuguese Association of Real Estate Developers and Investors (APPII), said 30 measures had been introduced to deal with the housing crisis with some already actioned and others being prepared for rollout.

As for slashing VAT on new build she felt confident it would eventually be approved. “I think there’s room to create an affordable housing model for sale at 6% VAT” she said.

“Our legislative amendment proposal (On VAT at 6%) was rejected, but we remain in the fight,” said the Secretary of State for Housing. The reduction cannot be extended to everything that is construction, it results from a European directive, so there can only be a reduction in VAT on social constructions, and as for housing at affordable rents, VAT is already at 6%.

On the Land Law, the minister said there had not been changes implemented yet, but there had been a change in the Territorial Management Instruments Legal Regime (RJIGT) which would be in force for five years.

As for streamlining and speeding up planning permission processes, the secretary of State said that the Legal Urbanisation and Building Regime (RJUE) and also part of the SIMPLEX policy had been subject to some changes considered necessary to ensure greater business predictability for real estate developers, particularly in terms of legal security.

As for the Building Code, the secretary of State said that work was underway, which will be more than a summary of all the legislation that interacts in building processes, and which will safeguard the General Regulation of Urban Buildings (RGEU).

This covered areas such as civil liability insurance, contract specifications, and regulation of the revision of project execution, because “we have to regulate what projects are undertaken at the refurbishment level”, she said.