Housing package passes first round thanks to Chega abstention

Portugal’s parliament approved overall a housing package on Friday aimed at alleviating the country’s chronic housing shortage and accessibility for the middle classes, particularly the young.

It did so with the support of the far-right populist party Chega, but since it was only approved ‘overall’ the opposition parties could still seek amendments.

The package involves slashing taxes from 23% to 6% on developers providing the projects involve affordable housing.

It also involves a review of a policy that aims to streamline and simplify urban planning regulations and processes called Simplex Urbanistico.

Chega, new the third largest political party in the parliament, abstained while the main opposition PS socialist and PCP communist parties voted against.

The parties that voted for were the governing PSD and CDS-PP coalition (Democratic Alliance) while the Liberal Initiative (IL) PAN (Nature, People & Animals) and the JPP (a Madeira-based party) abstained.

Portugal’s new housing package, part of the “Construir Portugal” programme, introduces tax breaks for landlords (rate drops from 25% to 10%), increased rent deduction for tenants (up to €1,000), easier mortgage access for young buyers (state guarantees), VAT reduction on new builds (6%), simplified licensing, and incentives for reinvesting capital gains from property sales into rentals, all aimed at boosting affordable housing supply and easing market access.