The Government presented the State Budget proposal for 2026 (OE2026) and has already made some promises that could ease the burden of family expenses. According to Notícias ao Minuto, the Executive guarantees that the new budget will bring a double positive effect: lower taxes and higher pensions.
According to the Minister of Finance, Joaquim Miranda Sarmento, this is a “reformist and pioneering budget”, which aims to consolidate confidence in public accounts and return income to citizens. The proposal, delivered to the Assembly of the Republic, was accompanied by an informative website created to clarify doubts about the main measures.
IRS will decrease in 2026
According to Notícias ao Minuto, the Government confirms new relief in terms of IRS. Rates between the second and fifth brackets will fall by 0.3 percentage points, and the income brackets will be updated by 3.5%, above the inflation forecast for next year. The minimum wage also rises, ensuring that those who receive the national minimum wage will continue without paying IRS.
This update, explains the Executive, aims to prevent inflation from penalizing family income. “The minimum wage will continue to not pay IRS”, emphasizes the Government, noting that the measure will allow “to increase the net income of workers”, especially those of the middle classes.
Reinforced pensions and social benefits
Pensions will also rise. According to the same publication, the Solidarity Supplement for the Elderly (CSI) will be increased by 40 euros, rising to 670 euros per month. Furthermore, the creation of an extraordinary supplement for pensioners is being evaluated, which could represent a relevant increase for those with lower incomes.
The Government estimates that the measures to update pensions and supplements represent an investment of around 700 million euros, covering Social Security and Caixa Geral de Aposentações beneficiaries.
Housing and tax benefits
Housing is another of the central axes of the budget. The Executive intends to reduce VAT on construction, lower the IRS rate applied to contracts with moderate rents and increase the collection deduction ceiling for tenants. According to Notícias ao Minuto, the construction and rehabilitation of thousands of houses with public financing are also planned, as well as the sale of State properties for housing use.
The Government believes that these measures will help balance the market and facilitate access to housing for young people and middle-income families.
Economic growth and transparency in accounts
The Executive’s forecasts point to economic growth of 2.3% in 2026, with the maintenance of the budget surplus and a reduction in public debt to less than 90% of GDP: a milestone that has not been seen for several years.
According to , the Government also highlights that this will be “the most transparent budget ever”. For the first time, the entire Central Administration and the Social Security Budget are now part of the program budgeting model, allowing any citizen to consult online the amounts allocated to each area and the respective performance indicators.
With the discussion of the document taking place in Parliament, the Executive hopes to approve the budget by the end of the year. If the measures are confirmed, 2026 could be the year in which the Portuguese feel a small, but important, relief in their wallets.
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