LISBON, May 12 (Xinhua) -- Portuguese President Antonio Jose Seguro promulgated a government decree on Tuesday introducing a package of tax relief measures aimed at expanding housing supply and addressing the country's housing crisis.
The package centers on a new concept of "moderate price," defined as a residential property sale price not exceeding 660,982 euros (773,349 U.S. dollars) and a monthly rent capped at 2,300 euros (2,691 dollars), equivalent to 2.5 times the national minimum wage.
For rental housing projects meeting the eligibility criteria, the tax rate on landlords' rental income will be reduced from 25 percent to 10 percent, while the VAT rate for related housing construction projects will be lowered to 6 percent. Landlords who sell properties and reinvest the proceeds in eligible rental housing will also be exempt from capital gains tax.
In addition, the ceiling for personal income tax deductions on tenants' rent payments will be gradually raised from 700 euros (819 dollars) to 1,000 euros (1,117 dollars). Meanwhile, non-resident homebuyers will be subject to a unified property transfer tax rate of 7.5 percent.
According to Portugal's National Institute of Statistics (INE), the country's Housing Price Index rose by 17.6 percent in 2025, accelerating significantly from the previous year and placing Portugal among the EU countries with the sharpest housing price increases.
"There has been a structural imbalance between available supply and growing demand for housing, especially in large urban centers and coastal areas, where demographic and tourism pressure is greater," said Nuno Afonso, CEO and founder of Grupo Rio, one of Portugal's largest construction and real estate development companies. ■