The Government guarantees that the new land law will reduce the price of new homes in metropolitan areas and district capitals by 20%, setting values below those recorded in Portugal in 2024.
At the end of December, the Portuguese Government approved a draft diploma that makes legislation on land use more flexible and simple, allowing local authorities to unlock land for housing construction.
In information sent to Lusa, the Ministry of Territorial Cohesion points out that the “new law sets maximum prices for new homes that are below the average values of real estate transactions registered in Portugal in 2024”, also using the National Statistics Institute (INE) to state that “the current average price per square meter in new homes is 50% higher than that of used housing”.
The minister Manuel Castro Almeida guarantees that “being able to buy new houses in which the maximum price limit is 20% below the current ones market prices not only prevents, but also prevents speculation”.
The Government understands that the law published on December 30, 2024, which will allow local authorities to release rustic land for the construction of houses for the middle class at moderate prices, will have a relevant anti-speculative effect on the market.
Using the analysis of the deed values of new houses registered on the Confidencial Imobiliário platform in 2024, the ministry says that “the average square meter values of houses sold in the municipalities with the most demand – Greater Porto, Greater Lisbon and district capitals – are notoriously higher than the maximum limit imposed by Decree-Law 117/2024”.
“In addition to Lisbon or Cascais, where the difference reaches 45% and 48%, there are relevant cities such as Sintra (36%), Viana do Castelo (34%), Gaia (32%), Braga (28%), Vila do Conde (27%), Viseu and Setúbal (26%), Barreiro (24%), Oeiras (23%), Aveiro (23%) or Coimbra (21%), where the limit imposed by the new law is considerably below prices currently practiced on the market”, continues the information sent to Lusa.
Using numbers again, the Government cites the “most recent data from the Consumer Price Index (IPC) from the National Institute of Statistics” to point out that “in the third quarter of 2024 the average value per square meter of new housing was 50% more higher than the average sale value of used housing – and all the houses that will be built on the rustic land that the local authorities transform into construction areas will be completely new”.
Minister Castro Almeida maintains that “the virtues of the law are not limited to combating speculation (…), preventing the creation of buildings in the middle of rural spaces” and assures that “the transition from rustic to urban land is impossible whenever they are in causes flood beds, flood zones, land defined as suitable for agriculture by the National Agricultural Reserve or areas classified as the Natura 2000 Network”.
“To solve all the housing problems in the country, much less than 1% of all available rustic land will be needed”assures the government official, for whom “the dispensation from bureaucracy and central approval will not make the decisions of local authorities any less transparent: not only do municipal executives include opposition councilors, but municipal assemblies have representatives from the main parties and all parish council presidents”.
Emphasizing that the new law will allow “local authorities to free up land for the construction of housing for the middle class throughout the country”, remembers that “the soils will have to be compatible with the existing urban area, with at least 70% of its area being occupied by residential buildings”, continues the document.
The ministry concludes that the decision to release the land for housing use “is only dependent on municipal councils and municipal assemblies – you won’t have to go to any other instance.”
“The measure is included in the ‘Build Portugal’ plan and allows, exceptionally, the creation of construction areas on soils compatible with the existing urban area”, points out the document.
For Castro Almeida, “this is a good way to increase housing construction, ensuring prices within reach of the middle class without dissuading companies in the real estate sector from investing”, using the INE again to recall that “in 2002, 125 thousand homes were built, contrasting with just 22 thousand homes in 2022”.
The announcement of the new law generated objectionwith the PS to propose changes to the decree; while the deputies of the Economy, Public Works and Housing committee unanimously approved the request for BE to hear, as a matter of urgency, the Minister of Infrastructure and Housing, Miguel Pinto Luz, the Deputy Minister and Territorial Cohesion, Manuel Castro Almeida, from ZERO – Associação Sistema Terrestre Sustentável, from Rede H – National Network for Housing Studies, by the architect Helena Roseta and Jorge Moreira da Silva, who was Minister of the Environment in 2013, when the land law was originally approved.
In the meantime, more than 600 experts and former political leaders criticized the measure in an open letter, while the National Association of Portuguese Municipalities considered that, in changing the land law, the vision of placing more responsibilities in the chambers is positive, but defended that there are improvements that can be made.
Next Tuesday the minister will be heard in the commission and on the 24th parliament will give its opinion on the matter.
