The Government approved in an extraordinary Council of Ministers, on Monday, changes to Housing and Local Accommodation,  which are part of the Construir Portugal program. These measures, according to the Minister of the Presidency, António Leitão Amaro, bring "justice and moderation" and "revoke errors" of the previous socialist Executive. But what changes?

Coercive leasing revoked and extended support for rents

The Executive of Luís Montenegro decided to revoke the coercive leasing of vacant homes and  extend the extraordinary support for rents. 

In a briefing after the meeting, the Minister of the Presidency stressed that the measure of the Mais Habitação Program, adopted by the Government of António Costa, "punished private property" and "did not help investment at all". "The State must set an example and cannot want to punish private individuals," said the minister.

In this line, several amendment proposals were approved. 

Rents of displaced workers over 100 km away may be deducted

The people who have to go to work for more than 100 kilometers and want to monetize their home will be able to deduct the rent of the house from this income with the new job. The bill approved by the Government aims to eliminate disincentives to labor mobility, creating a neutrality between what is received from the rent of the house that is left and the rent that is paid for the house that has to be rented.

"When someone has to go to work at a location more than 100 kilometers from home and when they leave they rent their house to a third party and have to rent [a new] house, we allow the rent paid to be deducted from the rent received at the house of origin", said the minister.

In this way, the IRS paid for the rent received will only apply to what is left after deducting the house rented in the new place of work, creating a situation of neutrality.

The minister said that there are no limits to the amounts that can be deducted since the measure has as a limit the value of the rent that will be paid and the income generated by the house that is owned.

Rent support again covers tenants with modified contracts

There is also a change in rent support so that people who have lost this subsidy, because there was a change to the contract, can receive it again.

At issue is the fulfillment of one of the measures provided for in the new housing strategy, approved by the Government in early May, which allows people who had a contract prior to March 15, 2023, and who lost it due to a change and this has been classified as a new lease contract.

"What we say is that if there was a contract before March 15, 2023 and if [this] remains between the same parties and in the same property, this equivalence is made and this inequity is allowed to be corrected", said Leitão Amaro. 

Thus, if the parties and the property remain the same, the tenant who had the support will receive it again even if there has been a change, renewal or replacement of the existing contract before March 15, 2023, provided that the person maintains the requirements such as having a rent payment effort rate greater than 35%.

Government will create a regime for the use of vacant public properties

The Government will create a legal regime for "semi-automatic injection of vacant public properties" into the market, for housing or other relevant projects, which will be done in conjunction with the municipalities, following the decision to end the coercive leasing provided for in the Mais Habitação program. 
 
"This is a new regime, in which the local grassroots initiative allows to accelerate, identify and make available, after recovery, either for housing or for other relevant public purposes, so many hundreds of public properties of the State that are currently idle, while there are so many people without homes or homes that are too expensive", said the Minister of the Presidency.

Leitão Amaro revealed that it will be up to the municipalities "voluntarily", by themselves or with private promoters, to identify vacant or underused public properties and then present to the State, namely through Estamo, a project for use "for a public purpose that falls within the attributions of the municipality and can be enjoyed by the people".

The minister stressed that this "green lane" for local authorities is voluntary and each project designed "must be within the attributions" of the municipality and be directed to a public purpose.

If the management of the proposed properties is the responsibility of Estamo, it can only object if the project presented by the municipality does not comply with the public interest or if it already has an imminent public project for that property.

The new regime, based on local grassroots initiatives, allows to accelerate the use of thousands of public properties of the State that are currently not being used for public housing or other projects, he added.

Proposal to revoke contribution in Local Accommodation approved

Proposals to amend the rules for local accommodation (AL) included by the previous executive in the Mais Habitação program were approved, such as the revocation of the extraordinary contribution, referring to the municipalities the regulation of the activity in their territories.

"We are revoking a series of regulatory prohibitions and changing others, which had as consequences the precariousness or affectation of past licenses of people who had invested in the last decade, expecting to have long-term returns and that this return, this confidence in the investment, had been betrayed by the action of the State", he stressed.

One of the measures, according to the minister, is the revocation of a fixation of the aging coefficient, "which in practice resulted in an increase in the IMI of local accommodation properties".

The Executive counts on the help of the municipalities, which will be able to make the rules and supervise their application taking into account the reality in their territory, to allow "finding different situations, but more harmonious".

The municipalities will be able to have a "regulatory, but also mediating role in conflicts" between owners within horizontal property buildings and establish the conditions for issuing and registering new licenses.

Leitão Amaro stressed that these revocations, namely "of the situation of licenses", do not mean an unlimited liberalization or a deregulation of the market where local accommodation operates.

Government says it is ending punitive vision in the housing market

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