Portuguese President Antonio Jose Seguro on Tuesday approved a government decree introducing sweeping tax incentives aimed at boosting housing supply and easing the country’s worsening affordability crisis.
The plan defines a new “moderate price” threshold — homes sold for up to 660,982 euros ($773,349) and rents capped at 2,300 euros ($2,691) a month, roughly 2.5 times the national minimum wage.
Landlords meeting those criteria will see rental income tax cut from 25 percent to 10 percent, and value‑added tax on eligible construction reduced to 6 percent. Sellers reinvesting proceeds in qualifying rental projects will be exempt from capital‑gains tax.
Tenants will gain higher rent‑deduction limits, rising from 700 euros ($819) to 1,000 euros ($1,117). Non‑resident buyers will face a unified property‑transfer tax of 7.5 percent.
Portugal’s housing prices surged 17.6 percent in 2025, according to the national statistics institute INE, among the sharpest increases in the European Union.
“There’s a structural imbalance between supply and demand, especially in major cities and coastal areas,” said Nuno Afonso, CEO of Grupo Rio, one of Portugal’s largest real‑estate developers.
