Moderate income is marking the hearing with the Minister of Infrastructure and Housing in the Assembly of the Republic as part of the assessment of the State Budget proposal for 2026 (OE2026).
O value between 400 and 2300 eurosannounced in September, which gives landlords a tax benefit: reducing the IRS rate from 25% to 10% and, if it is a company, the IRC is only levied on 50% of the rent.
With this measure, the objective is to return around 300 thousand empty properties to the market. “We are inviting these landlords” with a reduction in IRS and legal confidence, emphasizes the minister.
“Benefits to landlords are not housing policy”, accused congresswoman Sofia Pereira, from the PS, who criticized the high ceiling for this moderate rent. To which Minister Miguel Pinto Luz responded that “you don’t need to be an economist to understand when a maximum ceiling is given, demand is not elastic”. “You just don’t see those who don’t want to,” he said.
The minister explains that a landlord who charges 800 euros for a T2 in Leiria will not increase the rent to reach 2300 euros. “This doesn’t exist,” he says. With several criticisms, Mariana Mortágua, from Bloco de Esquerda, also stated: “if demand was elastic, there would not be the problem of lack of supply with prices rising by 40% or 50%”.
When the creation of the concept of moderate income was approved by the Council of Ministers, it was supposed to eliminate “all others”. Even so, Miguel Pinto Luz guarantees that the Government decided maintain the benefits of the Affordable Leasing Program (PAA)implemented in 2019 by the Government of António Costa, which grants landlords exemption from IRS and IRC on rents, which must be at least 20% lower than the municipality’s median.
He argues that in the short term it is necessary to increase social support to combat the housing crisis, especially for “the Portuguese who cannot wait for the houses to be built”. Market regulation requires “measures that point the way, which is why we maintained the PAA”, because “they try to regulate the market, not impose it”. “My objective was not to cause disruption, but to have continuity”, guaranteed Miguel Pinto Luz.
Minister devalues criticism about failures in IHRU service
In response to deputy Carlos Barbosa, from Chega, who recalled that “the IHRU does not respond to anything, what is happening is a scandal, we have families waiting for a response for over a year”. Miguel Pinto Luz guaranteed that “Porta 65 is complying with the steps that the legislation requires, 45 days of response”
The minister also corrected the reports that there are only 20 passwords per day by housing movements and by the users themselves who turn to the Institute of Housing and Urban Rehabilitation (IHRU). “There are 20 passwords in Lisbon and 14 in Porto for PAER [Programa de Apoio Extraordinário à Renda]”, he stated.
The Extraordinary Income Support Program, also implemented by the Costa Government, currently covers more than 134,100 tenants. But there are 43 thousand beneficiaries with support suspended due to inconsistencies, such as lack of correspondence between the landlord’s and the tenant’s IRS.
There are 167 daily passwords available every day and “every month the IHRU serves almost four thousand people”, assured the minister.
VAT reduction to 6% advances in the 1st quarter of 2026
Without saying much about the measures announced in September, such as the VAT reduction to 6%the Minister of Infrastructure and Housing states that “until the 1st quarter of 2026 we will have VAT at 6% for projects that are completed after that date”.
This benefit applies to buildings for sale up to 648 thousand euros or to housing that falls under the moderate income regime.
Miguel Pinto Luz admits that investors are waiting for this reduction to come into effect and there needs to be “speed”, “but it will also depend a lot on this house”, referring to the discussion process in the Assembly of the Republic.
After the budget process, the fiscal discussion process will begin, in which this measure is included. “We wanted to make the budget watertight” in the face of this discussion, explained Miguel Pinto Luz.
Regarding the public-private partnership program for the management of public assets, which will be used for affordable rental, the minister indicates that around five thousand houses will enter the market in Lisbon and Porto, as a result of the 14 properties already identified. “Contracts will be signed on this in 2026”, but the timing is foreseen in the “next three years”.
Also regarding the 133 thousand houses identified by the Local Housing Strategies, the Secretary of Housing, Patrícia Gonçalves Costa, explained that 59 thousand are covered by the 1st Law program and the remaining approximately 75 thousand “will be implemented depending on the dynamics and structures that the municipalities are able to implement”.
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