Portugal's Council of Ministers has formally enacted an ambitious housing stimulus package designed to alleviate acute affordability pressures confronting young adults and domestic families. Chaired by Prime Minister Luís Montenegro, the cabinet ratified statutory decrees eliminating municipal property transfer taxes (IMT) and stamp duty for first-time homebuyers aged 35 and under.
Under the new fiscal legislation, qualifying young purchasers are completely exempt from IMT and stamp duty on primary residences valued up to €316,772 ($350,000). For homes valued between €316,772 and €633,453, buyers benefit from partial exemptions, dramatically reducing upfront closing costs that previously locked young professionals out of homeownership.
Tax Relief Empowers Young Adults to Enter Housing Market
To complement homebuyer relief, the government unveiled targeted tax incentives for the private rental market. Landlords executing long-term residential contracts will see their autonomous personal income tax rates reduced from 28% to tiered rates as low as 10% for leases extending beyond five years.
The dual-track approach seeks to redirect privately owned apartments back into traditional residential leasing, reversing years of rental stock conversion into short-term tourist accommodation across Lisbon, Porto, and the Algarve.
“Supporting home access for young Portuguese families and revitalizing long-term residential leasing are central pillars to restoring generational hope.” — Luís Montenegro, Prime Minister of Portugal
Revitalizing the Long-Term Residential Rental Supply
Municipalities will also receive streamlined zoning powers and expedited building licensing protocols to accelerate the conversion of commercial properties and disused municipal land into affordable residential quarters.
Real estate associations and youth advocacy groups welcomed the swift enactment of the measures, projecting that tens of thousands of young Portuguese households will achieve homeownership over the coming year.
Frequently Asked Questions
Who qualifies for the IMT tax exemption in Portugal?
First-time buyers aged 35 or younger purchasing a permanent primary residence valued up to €316,772 receive a full tax exemption.
What rental incentives were approved by the Portuguese cabinet?
Landlords offering residential leases exceeding five years will benefit from reduced personal tax rates down to 10%.
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