Legislation set to cap rental prices

By Viriato Villas-Boas, in News · 14-06-2019 01:00:00 · 0 Comments
Legislation set to cap rental prices

The affordable housing programme is set to come into effect in July and aims at lowering rents.

A new law has been published in response to the increasing prices of the letting market in Portugal. Within the new framework, prices could range anywhere between €200 for a studio flat and €1,700 for a five-bedroom plus living room apartment.


The programme will see that three hundred and eight municipalities are ranked into six categories “based on the variation of the average value of rents per square metre of new lease contracts disclosed by the National Institute of Statistics (INE)”, a procedure which will be updated annually.


After properties are ranked at a national level according to their municipality, rental prices will then be calculated based on factors such as the quality of accommodation, energy certification, location and average value of rents per square metre, as published by the INE.


Unsurprisingly, Lisbon is set to be in a category of its own as the most expensive municipality nationwide, where a studio apartment is to be capped at €600. Contrastingly, most of the remaining municipalities are bound to cap their studios at €250.


The law will come into force on 1 July, and will see that participating landlords have a full tax exemption on “rents resulting from leasing or housing subcontracting contracts framed in the accessible housing programme”.

Minimum Wages


The accessible housing programme arrives in the context of Portugal’s newly revised minimum wage, which has slightly increased from €580 in 2016 to €600 earlier in January.


Although welcomed, the increase was among the lowest in the European Union, which, according to the Eurofound Social Intervention Study Centre (CESI), places Portugal at the bottom of the ‘“average category” that includes Euro area countries with average performance in terms of minimum wage rises in real terms (at 2015 prices) between 2010 and 2019.


The CESI also found that the minimum monthly wage per hour in Portugal (€3.94) is lower than in Greece (€4.27) and Spain (€6.09).



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