The newly formed Portuguese government has confirmed plans to repeal several housing regulations introduced under the previous administration’s Mais Habitação program. This announcement follows through on campaign promises by the Democratic Alliance (PSD/CDS-PP/PPM), emphasising a shift from what it labels as “penalising” policies including forced rentals and rent freezes.

For many new property owners in Portugal the ‘More Housing’ program was a concern, as well as for various interest groups including Portugal’s influential tourist industry. New apartments that were completed were excluded from the AL licensing, meaning fewer holiday rentals, and in perhaps turn fewer tourists, who flock to ALs throughout the country every summer.

Significantly, the controversial Extraordinary Contribution on Local Accommodation (CEAL), which imposed a 15% tax on certain local lodging establishments, is expected to be abolished. This tax targeted apartments used for short-term rentals unless exempted under specific conditions such as location or limited rental days.

This was a significant blow, again to the tourist accommodation sector as the average owner of a two-bedroom property was faced, and in many cases had already received tax bills between €1,000 and €1,500.

The government’s program, presented in the Assembly of the Republic, marks a stark departure from the previous socialist policies, aiming to relieve the pressures on local accommodation providers and stimulate the private housing market.

While these reversals signal potentially welcome changes for property owners and investors, the details of these policy shifts are still unfolding. It is advisable for those affected to consult with a tax advisor or accountant to understand the implications fully and prepare for the upcoming changes. This development marks a significant pivot in housing policy under the leadership of Prime Minister Luís Montenegro, reflecting broader economic priorities of the new government.

The changes are set for discussion in the upcoming plenary sessions of the Assembly, underscoring the government’s commitment to revising what it considers disproportionate legal limitations on property and land use in Portugal.