On March 30th, two legislative proposals regarding the “More Housing” programme were approved in the Council of Ministers, which include several changes to the local accommodation regime and aim to address the housing crisis.

According to the Government, these measures are intended to ensure a balance between housing solutions and the continuity of local accommodation, especially in areas of greatest pressure.

In this regard, the issuing of new local accommodation licenses will be suspended until 2030 in high density territories or where there is a housing shortage. The measure is applicable to apartments and lodging establishments integrated in a building unit. 

Additionally, current licences will be reviewed by municipalities in 2030 and will be renewable for five years from that date. The proposals also provide a new expiry regime for non-active licences as well as the expiration of licences due to any cause of transfer, except in cases of succession.

The changes also include the possibility for condominiums to terminate licenses issued without their approval, through a ruling of more than half of the building's share, and the extension of supervisory powers to Town Councils.

Furthermore, it’s created a tax regime which includes a new exemption from IRS and IRC for establishments registered until 31 December 2022 and with a lease agreement entered until 31 December 2024 (registered on the Finance Portal), in order to encourage the transition of houses from local accommodation to the rental housing market.

The new tax regime will also include an Extraordinary Contribution on Local Accommodation (CEAL) of 20% (instead of the 35% initially presented) which varies according to the operating income, the evolution of rents and the weight of local accommodation in the respective area.

In addition to the measures related to local accommodation, the government has approved several tax cuts on leasehold, namely the reduction of the special IRS rate on rents from 28% to 25% and the IRS and IMI exemption for the construction of properties with affordable renting.

Another measure worth highlighting is the coercive lease of apartments which have been vacant for more than two years (classification attributed by municipalities) in high density territories, in order to encourage the availability in the housing market of houses that are unused.

The legislative proposals will now be debated in the Parliament.