The Mais Habitação Program (Law n.º 56/2023) came into force on October 7, 2023. According to the Portuguese government, it is an ambitious plan to promote access to affordable housing. This legislative package provides for changes, among others, in renting, local accommodation, tax benefits and the Golden Visa.
1.1 Limit on initial rent in new residential lease agreements
The initial rent for new residential leases on properties for which leases have been in force for the five years prior to the entry into force of this law may not exceed the value of the last rent practiced on the same property in a previous contract, applied with a coefficient of 1.02.
When the immediately preceding lease has not been subject to one or more legally permitted updates, the initial rent may also be subject to the annual coefficients under article 24 of Law no. 6/2006, of February 27, provided that no more than three years have passed since the date on which it would initially have been possible to apply them. In this case, the coefficient to be considered for 2023 is 1.0543.
This limitation applies to contracts that exceed the general rent price limits by type set out in Ministerial Order 176/2019 of June 6 (Regulation of the Affordable Rent Program).
1.2 Old lease contracts do not transfer to the NRAU
Housing rental contracts prior to 1990 are not transferred to the NRAU, provided certain requirements are met.
1.3 Support for the promotion of affordable rental housing
Support for the promotion of affordable rental housing has been created. Housing and construction cooperatives, which meet certain access conditions; commercial companies engaged in civil construction, in consortium or in another form of association with commercial companies whose corporate purpose includes rental housing and property management, which meet certain conditions, are eligible; IHM – Investimentos Habitacionais da Madeira, EPERAM, and the Regional Directorate of Housing of the Azores, alone or in partnership with the entities referred to in the previous paragraphs; municipalities and parish councils, alone or in partnership with the entities referred to above; and misericórdias, private social solidarity institutions and legal persons of public administrative utility or recognized public interest.
2. Local accommodation
2.1 Suspension of new registrations
With the exclusion of inland territories and the Autonomous Regions, the issuing of new registrations of local accommodation establishments, in the form of apartments and lodging establishments integrated in an autonomous fraction of a building, is suspended throughout the national territory.
2.2 Validity and renewal of registrations
The registration of local accommodation establishments lasts for five years, renewable for equal periods, and renewal requires an express decision by the competent municipal council.
Local accommodation registrations issued on October 7, 2023 are reviewed during the year 2030, except for local accommodation establishments that constitute a real guarantee for loan contracts signed by February 16, 2023, which have not yet been fully repaid by December 31, 2029, the first review of which only takes place after the full repayment initially contracted.
2.3 Lapse of inactive registrations
Within two months of October 7, 2023, holders of local accommodation registrations are obliged to prove, by submitting a tax return, that they are maintaining their operating activity, by communicating the effectiveness of their exercise on the RNAL platform – National Registry of Local Accommodation, through the Single Electronic Counter provided for in article 6 of Decree-Law no. 92/2010, of July 26.
2.4 Opposition to the exercise of local accommodation by the condominium
In the event that the local accommodation activity is carried out in an autonomous fraction of a building or part of an urban building that can be used independently, the meeting of condominium owners, by resolution of at least two thirds of the building’s permilage, may oppose the exercise of the local accommodation activity in said fraction, except when the constitutive title expressly provides for the use of the fraction for local accommodation purposes or there has been an express resolution of the meeting of condominium owners authorizing the use of the fraction for that purpose.
2.5 Extraordinary contribution on local accommodation apartments
An extraordinary contribution will be levied on apartments and lodging establishments that are part of an autonomous fraction of a building used for local accommodation.
3. Tax benefits
3.1 Value Added Tax
Sections 2.18 and 2.23 of list i annexed to the VAT Code are amended to read as follows:
Item 2.18 – “Construction or rehabilitation contracts for affordable housing, cost-controlled housing or housing for affordable rental under the terms defined in an ordinance of the member of the Government responsible for the housing area, regardless of the promoter, provided that at least 700/1000 of the buildings in horizontal ownership or all of the buildings in total ownership or autonomous fractions are assigned to one of the aforementioned purposes and certified by IHRU, I. P., or, when promoted in the Autonomous Region of Madeira or the Autonomous Region of the Azores, by IHM – Investimentos Habitacionais da Madeira, EPERAM, or by the Regional Housing Directorate of the Azores, respectively.”
Item 2.23 – “Contracts for the rehabilitation of buildings and contracts for the construction or rehabilitation of public facilities for collective use, located in urban rehabilitation areas (critical areas of urban recovery and conversion, intervention areas of urban rehabilitation societies and others) delimited under the terms of the law, or carried out as part of rehabilitation and rehabilitation operations of recognized national public interest.”
3.2 Personal Income Tax
Property income from housing leases, including that referred to in Article 8(5)(b) (income from contracts for real rights to durable housing), is taxed at an autonomous rate of 25%, instead of the previous 28%.
3.3 Municipal Tax on Real Estate Transfer
Within the scope of the tax exemption on the acquisition of buildings for resale, the period in which the property must be resold is reduced from three years to one, with new rules on the expiry of the exemption in the event of non-resale or resale for resale.
There is no longer an exemption when it is found that the buildings acquired for resale have been given a different destination or that they have not been resold within one year or have been resold again.
3.4 Municipal Property Tax
Within the scope of the IMI exemption, a new concept of “land for housing construction and buildings intended for housing use” has been created: land for construction where the prior control procedure for construction works for housing use has been initiated with the competent authority, and for which there has not yet been a final decision, express or tacit, on the procedure; and buildings where the prior control procedure for housing use has been initiated with the competent authority, and for which there has not yet been a final decision, express or tacit, on the procedure.
4. Golden Visa
New applications for residence permits for investment activities granted under the 1.5M capital transfer and real estate investment modalities, namely for the acquisition of real estate for €500,000.00 and €350,000.00 subject to rehabilitation works (sub-paragraphs i), iii) and iv) of paragraph d) of no. 1 of article 3 of Law no. 23/2007, of July 4, under the terms of its article 90-A) are not admitted.
However, the possibility of renewing residence permits for investment activity is not affected when these permits were granted under the previous legal regime. Applications for the granting and renewal of residence permits for investment activity that are still pending remain valid.
The remaining modalities remain in force: creation of at least 10 jobs; transfer of €500,000.00 or more for scientific research activities; transfer of €250,000.00 or more for artistic production or recovery and maintenance of national heritage; transfer of €500. 000.00 or more for the acquisition of shares in non-real estate collective investment undertakings set up under Portuguese law, whose maturity at the time of the investment is at least five years and at least 60% of the value of the investments is made in commercial companies based in Portugal; transfer of €500,000.00 or more for the incorporation of a commercial company.