Portugal’s Socialist Party (PS) has proposed 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.
The proposals were announced by Socialist leader José Luís Carneiro in a new open letter to Prime Minister Luís Montenegro, published in Público newspaper on Monday, October 19.
The initiative comes amid growing public pressure over Portugal’s housing crisis, following demonstrations in several cities demanding more affordable homes and action against rising housing costs.
Carneiro argues that hundreds of thousands of properties remain empty despite being suitable for occupation, and believes targeted tax incentives could encourage owners to sell or rent them.
Capital gains tax exemptions and lower rental taxes
Under the proposed exceptional 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 has 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 also 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 is Carneiro’s second intervention addressed directly to Montenegro on housing, following an earlier communication in August 2025, which he says went unanswered.
The Socialist leader accused the government of lacking the political will and capacity to implement effective housing policies.
He warned that delays were forcing young people to remain in their parents’ homes for longer while families continued to spend an excessive proportion of their income on rent.
“The housing crisis does not follow political calendars,” Carneiro wrote, arguing that every year lost meant further hardship for households struggling to find affordable accommodation.
He urged the government to stop postponing decisions and adopt measures capable of increasing housing supply.
The new proposals come as parliament prepares to debate the 2027 State Budget, although housing was not among the four conditions previously set by the Socialists for allowing the budget to pass.
The measures remain opposition proposals and would require legislative approval before taking effect.