With no-one denying Portugal’s desperate housing crisis, the focus this week is on how to fix it – as fast as humanly possible.
After “a sea of people” converged in central Porto to kick off protests that punctuated the last 10 days and spread to several towns and cities, not least Lisbon, President Seguro added his voice to the growing impetus for politicians to act.
Not to tinker around the edges, as the current government has been criticised for doing. But to find lasting solutions, that will unblock the country – because that is exactly what housing costs have done over the last 10 years: they have stopped people from moving forwards.
Marking International Day for the Eradication of Poverty last Sunday, Portugal’s head of State showed that he completely understood the crowds setting up protest camps in Porto and Lisbon. “A Europe in which so many young people cannot afford a home, start a family or believe that their work will allow them to live better risks losing the trust of the younger generations,” he told a meeting of the Arraiolos Group in the Slovenian town of Brdo, before his statement on Sunday, in which he impressed that “creating wealth and protecting those most in need are two sides of the same coin. A fair society requires everyone’s commitment to ensure that no one is excluded”.
As leader writers have warned, continuing down the path of the last 10 years will ultimately see democracy eroded – thus the crunch-point: the moment where things have to change before the crisis changes everything.
First out of the gate was André Ventura, of CHEGA, the party that is ostensibly supporting the government’s unpopular rental reform.
At a press conference at CHEGA’s national headquarters in Lisbon on Saturday, Ventura argued for the need for an agreement between the parties to approve measures that can “truly address the issues that matter regarding housing in Portugal and the major problems” of recent years.
CHEGA will propose “the reassessment of tax benefits for those who are in Portugal with a lot of money to buy houses”, a review of the Municipal Property Tax (IMI, or more commonly known as property rates) and a 50% increase in personal income tax deductions relating to rent and mortgage payments.
Asked whether implementing these proposals could jeopardise the already precarious budget surplus forecast for next year, André Ventura acknowledged that “it is worth taking the risk” if it means an improvement in housing conditions for Portuguese people.
“There is no point in having a country with healthy public finances and poor people,”he said. “Honestly, there is no point in having a country with balanced accounts when people face uncertain bills every month. I think that is the calculation we have to make”.
Does this approach mean that the agreement with the government to amend the rental law is no longer valid? Ventura admitted that if the executive “does not correct” the legislation according to CHEGA’s designs, the amendments to the rental law “will not pass”.
As to demonstrations that marked the last week-plus, Ventura suggested that if solutions aren’t quickly agreed, they will only escalate “with more force, more determination, more ambition”- and with the participation of other organisations, including political parties.
“It could cease to be a demonstration or a group of minority demonstrations and become genuine cries of dissatisfaction across society involving associations, parties, movements”, he warned, adding that “CHEGA will fight for housing if the housing problem is not resolved”.
This marked the point where political watchers will have started nodding their heads: CHEGA is definitely ready to use this crisis – and not just for the ‘benefit of the people’.
Not so transparent have been PS Socialists, whose leader José Luís Carneiro (already seen by some polls as the people’s preferred choice for prime minister) published an open letter to the leader of the coalition government Luís Montenegro, on Monday, setting out his party’s proposals to start fixing housing in Portugal.
In a nutshell, Socialists are pushing for a three-year package of tax incentives aimed at bringing empty homes onto the market, including exemptions from capital gains tax on property sales worth up to €300,000.
Carneiro argues that hundreds of thousands of properties remain empty despite being suitable for occupation, and believes targeted tax incentivescould encourage owners to sell or rent them.
Capital gains tax exemptions and lower rental taxes
Under the proposed three-year scheme, sales of existing properties worth up to €300,000 would be exempt from capital gains tax, provided the homes were intended for the buyer’s permanent residence.
Properties sold for between €300,000 and €500,000 would benefit from reduced capital gains taxation.
The Socialists also propose exempting qualifying purchases and associated mortgages from stamp duty.
For landlords, the party is proposing an optional five-year rental contract under which rental income would be taxed at just 5%.
The arrangement would also include a public guarantee protecting landlords against unpaid rent, with the aim of encouraging more property owners to enter the long-term rental market.
Carneiro also wants improvements to the Balcão do Arrendatário e do Senhorio, the public service intended to help resolve disputes between tenants and landlords, which he argues is not functioning effectively.
Public guarantees for tenants and landlords
The Socialist leader equally renewed calls for the government to adopt a previously proposed public rental guarantee scheme as part of the 2027 State Budget.
Under the proposal, the State would compensate landlords for unpaid rent or damage to their properties and subsequently seek reimbursement from tenants.
Participation would be voluntary and subject to agreement between landlords and tenants.
The scheme would cover young people aged between 18 and 35, as well as households meeting specified income criteria, provided their rental agreements were registered with the tax authorities and rents remained within affordable housing limits.
The PS has previously proposed increasing the annual income tax deduction for rent payments to €1,000 from 2027, alongside measures to discourage property speculation and bring vacant homes back into use.
Long-term housing strategy
Beyond the immediate tax incentives, Carneiro reiterated plans for a National Affordable Housing Service, known as SENHA, which the Socialists intend to develop as a long-term strategy for the next decade.
The proposed programme would bring together existing government housing initiatives while involving municipalities, cooperatives, associations and private developers in expanding the supply of affordable homes.
Carneiro said the party was preparing the programme through a national consultation process covering construction, taxation, public housing, young people’s needs and social support.
Government accused of failing to act
The letter was José Luís Carneiro’s second intervention addressed directly to the prime minister on housing, following an earlier communication in August 2025, which he says went unanswered.
The Socialist leader accuses the government of lacking the political will and capacity to implement effective housing policies. This is echoed by political commentators who stress nonetheless that the crisis cannot be laid at this government’s door – it had 10 years of Socialism in which to develop, and during which housing prices rose no less than 180%.
The new proposals come as parliament prepares to debate the 2027 State Budget – and at a point where PS Socialists are already facing criticism for ‘allowing the budget to pass’ (by pre-announcing abstention, on the basis of four conditions – none of which concern housing).
Could this crisis develop into a wider crisis of confidence in government? With so little in the way of ‘push-back’ against the ubiquitous criticism of recent days, the answer is most definitely ‘yes’.