Housing measures in Portugal stir controversy

Delving into the realm of Portugal's housing landscape, one encounters a series of measures that have sparked significant controversy. These provisions, encompassed within a bill that secured parliamentary approval, drew considerable attention, only to be met with rejection by Portuguese President Marcelo Rebelo de Sousa on August 21. Despite this setback, the Sociality Party of Portugal (PS) has signaled its intention to reassert these measures following the conclusion of the summer recess. Within this intricate tapestry of housing regulations, several key provisions stand out, each carrying implications that resonate far and wide.

Compulsory Rental

One of the measures causing significant controversy involves homes that have remained unoccupied for over two years and are situated outside the country's interior. Owners have a 90-day window to respond once notified to either undertake renovations or make the property available for rent. In the absence of a response from the owner within the stipulated timeframe, the municipality can enforce the rental of the property.

Exemptions from Taxes

Capital gains arising from the sale of real estate to the state or municipalities will be exempt from IRS, except for those earned by residents from territories classified by Portugal as tax havens, and those resulting from sales involving the exercise of the right of first refusal.

Condominium Owner Input for New AL (Alojamento Local )

Condominium owners will now have the opportunity to voice their opinions regarding new local accommodation setups within their units. The amendment stipulates that "the constitutive title of the horizontal property can be modified by public deed, with the agreement of all the condominium owners". For those unaware, Alojamento Local licenses are issued by the Câmara Municipal (local council town hall) and are required if you are going to rent your property out in the short term.

Portuguese Landlords may be compelled to take action to save their assets from the state.

Suspension of New AL Licenses

The issuance of new local accommodation registrations outside the country's interior territories (low density areas) will be put on hold. This suspension, not applying to properties included in the Revive Nature Fund or to autonomous regions, will remain in effect, wholly or partially, within the municipalities declared to be facing housing shortages.

Renting for Subletting

To boost the rental market supply, the state proposes to lease vacant homes to private individuals and subsequently allow subletting. The rent paid to the landlord will come with tax advantages as long as the lease contract is for a minimum of five years and the rent aligns with the prices and types specified in the Affordable Rental Support Program (PAA).

End of Golden Visas

With the enactment of the new law, new applications for residence visas tied to investment activities will no longer be accepted. This change will not impact the renewal of previously granted permits. Applications for obtaining and renewing residence permits related to investment activities will remain valid, including those "undergoing prior control procedures at local councils" as of the law's effective date.

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