Lisbon, Oct. 8, 2025 (Lusa) - The Portuguese minister of the economy and territorial cohesion, Manuel Castro Almeida, said on Wednesday that "by the end of next year, differences will begin to be felt" in house prices and housing rents, defending the Government's proposals.
"This issue has taken years to worsen and it will take us a few years to resolve it, but it will take a few years, it won't be resolved in a single day, but I think that from the end of next year, differences in house prices and rents will begin to be felt," said Castro Almeida on the sidelines of the Millennium Talks COTEC Innovation Summit event, which took place today at the Lisbon International Fair (FIL).
Speaking to journalists, the minister said that the housing crisis is "a huge problem", but that the government "is responding with a set of unprecedented measures".
Manuel Castro Almeida believes that proposals such as increasing the supply of land through the land law, reducing VAT on construction and income tax for those who rent houses, along with "the number of houses that the state will build", should stimulate this fall in prices.
Castro Almeida added that the government will also create a credit line with the support of the European Investment Bank (EIB) so that local councils can create plots on which people can build their homes.
Prime Minister Luís Montenegro announced on 26 September that the government will lower the VAT rate to 6% for the construction of houses for sale up to €648,000 or, if they are for rent, with rents up to €2,300 (a "moderate" rent) - a tax regime that will remain in force until 2029.
On the other hand, the minimum VAT rate of 6% will also apply to "the construction and renovation of buildings" for rentals up to €2,300.
The Association of Tenants and Condominium Owners of Northern Portugal (AICNP) today criticised the measures proposed by the Government for housing, considering that they "accelerate the crisis" and contribute to "further deregulating the market".
The housing price index rose 17.2% in the second quarter, accelerating 0.9 percentage points compared to the previous three months, with more than €10 billion having been transacted, the National Statistics Institute (INE) announced today.
According to the INE, prices for existing homes rose 18.3% and new homes 14.5% between April and June.
Compared to the previous three months, the Housing Price Index (IPHab) rose 4.7%, against 4.8% in the previous quarter, with existing homes rising 5.1% and new homes rising 3.8%.
JO/AYLS // AYLS
Lusa
