According to the Commission, the temporary support measures previously introduced in Portugal have proven insufficient to address the structural problems in the housing market. Past governments have relied on subsidies and tax incentives, but failed to substantially expand public housing stock, which remains below 2% of the total housing inventory. Meanwhile, around 12% of dwellings across the country are vacant, further exacerbating imbalances between supply and demand.

In its latest recommendations, Brussels calls for the implementation of rent controls and limits on short-term lets as part of a wider national strategy. This new strategy should include clear timelines and a rigorous assessment of investment needs in housing. The Commission stresses that if Portugal is to reach its target of increasing public housing to 5% by 2026, it must go beyond declarations of intent and accelerate the construction of the 26,000 homes promised under the national Recovery and Resilience Plan (PRR). However, the Commission casts doubt on whether this target will be met.

The introduction of rent caps and regulations on AL is a key pillar of the strategy outlined by Brussels, especially in urban areas under intense housing and tourism pressure. The aim is to protect the most vulnerable groups in society, including young people, low-income households, and the middle class, all of whom continue to face significant obstacles in accessing affordable housing.

The Commission also highlights the need for an active recovery of vacant properties and a reinforcement of the “Housing First” policy, which prioritises offering stable housing to the homeless, alongside ongoing social support to promote integration. According to Brussels, relying solely on subsidies—such as the Porta 65+ programme—or tax benefits, without simultaneously increasing housing supply, does not constitute a lasting solution.

Regarding short-term holiday rentals, the Commission recommends placing firm limits on AL, particularly in cities experiencing high tourist and housing demand. Such measures aim to prevent further erosion of the residential rental market. The European Union sees these restrictions as a way to redirect properties toward more stable, long-term rental arrangements, thereby boosting the availability of affordable homes.

Brussels also pressures Portugal to develop a national housing strategy grounded in robust statistical data. This strategy should include a realistic timetable for licensing and construction, as well as a reliable assessment of investment requirements, in order to address the growing housing shortfall.
In this context, the Commission warns that the measures currently in place are merely palliative and unlikely to bring about meaningful, structural change. It underlines that promises made by both the former government led by António Costa and the current administration remain largely unfulfilled. With only around 2,000 public homes delivered so far, the goal of completing 26,000 by 2026 is at serious risk.

The national implementation of rent and AL limits could represent a turning point in Portuguese housing policy. However, this shift depends heavily on the ability of the new government to translate EU recommendations into effective legislation, coordinated across central and local authorities, with continuous monitoring and clearly defined objectives. Ultimately, introducing these caps on rents and short-term lets could be a decisive step towards making housing truly accessible in Portugal—especially for those who need it most.

Source: SUPERCASA
Allgemein, Immobilienmarkt, Portugal