In response to the growing housing crisis, the Portuguese government has implemented the “Construir Portugal – Nova Estratégia para a Habitação” program, which comes into force on August 1, 2024. This program aims to revitalize the housing market and offer special support to young people in purchasing their own homes.
Main changes:
1. Public guarantee to obtain financing for the purchase of a first home.
With the introduction of the public guarantee, the state places itself in the legal position of quasi-guarantor in the purchase of a first home, offering a guarantee that can cover up to 15% of the value of the property, with the maximum value of the property not exceeding 450,000,00€.
This guarantee allows young people to access 100% of the financing needed for the purchase, reducing the need for equity.
2. Exemption from IMT and Stamp Duty for Young People
Young people up to the age of 35 will benefit from an exemption from paying Municipal Property Transfer Tax (IMT) and Stamp Duty when purchasing property for their own permanent home.
This exemption applies to properties up to the value of €316.272,00€, reducing the initial cost of buying a home. For values above this amount and up to the limit of 633.453,00€, the exemption from the previous bracket is maintained.
This tax incentive aims to facilitate young people’s entry into the real estate market and support their financial independence at an early stage in their lives.
3. Legislative changes to the exemption from capital gains tax on the sale of the primary habitation
The government has proposed that it should once again be possible to buy a house in one year, sell it after 12 months and benefit from the exemption of taxation on capital gains.
The period in which it is necessary to own a property and benefit from the exemption from capital gains taxation has therefore been reduced from 24 to 12 months. This change means that homeowners can now sell their home and primary habitation within one year of ownership and use the proceeds of the sale to buy a new home, while maintaining the exemption from paying IRS on the capital gains generated.
This legislative change, which is still awaiting approval in Parliament, aims to boost the real estate market by allowing greater flexibility and mobility for homeowners.
Explore the possibilities that these new measures can offer for your housing situation and, if you need legal advice, talk to us.
The information presented does not dispense with legal advice and analysis of the specific case.
