Source: Adobe Stock Author: Redaction Record surplus in Social Security Social Security closed the first four months of the year with a €2.885 billion surplus, the highest level recorded in the first four-month period of the past decade. This performance reinforces the role of Social Security as one of the main pillars of balance in public finances, in a context where the overall state balance has worsened. The result represents growth compared to the same period last year and reflects the strong dynamics of the Social Security contributory system, which continues to benefit from positive labour market developments. Revenue and expenditure of the contributory system Social Security’s performance is mainly driven by the increase in contributory revenue, which grew by around 8% in the first four months of the year. This increase was driven by a higher number of workers contributing and rising average wages, as well as a decline in registered unemployment. On the expenditure side, Social Security recorded a more moderate increase, below the level forecast in the State Budget. Old-age pensions, the main component of Social Security expenditure, even recorded a slight year-on-year decline, explained by base effects linked to extraordinary adjustments in the previous year. Impact on public accounts and outlook The Social Security surplus had a decisive impact in mitigating the public administration deficit, helping to offset the deterioration in the state balance. Without this contribution from Social Security, the overall deficit would be significantly higher. Despite the positive performance, future prospects depend on economic growth, employment trends and the ability to sustain contribution growth. Population ageing and pressure on social spending continue to represent structural challenges for the medium-term sustainability of Social Security.
Source: Adobe Stock Author: Redaction New pedestrian and cycle bridge on the Douro The municipalities of Porto and Vila Nova de Gaia have formalised the project for a new pedestrian and cycle bridge over the River Douro, an infrastructure that will link both riverbanks between the Luiz I Bridge and the Arrábida Bridge. The project is expected to represent an investment of around 25 million euros and strengthen urban mobility in the metropolitan area. The new pedestrian and cycle bridge emerges as a strategic solution to improve circulation between the cities and ease tourist pressure on the Luiz I Bridge, one of the most visited in the region. Strategic location and mobility impact The future crossing will be built around 350 metres downstream from the Luiz I Bridge, with an approximate span of 250 metres over the Douro riverbed. This location was chosen to balance mobility flows and create a functional alternative for pedestrians and cyclists. The project also aims to improve the quality of life of residents and visitors, promoting more sustainable travel between Porto and Gaia and reducing reliance on car transport in central areas. Tender and construction timeline A design and build tender, limited by prior qualification, will be launched by the end of 2026, aiming to ensure high technical and quality standards. The process will be managed by a jury led by engineering representatives. Officials estimate that the pedestrian and cycle bridge will be completed by the end of 2029, although they acknowledge that deadlines depend on legal and administrative procedures linked to the tender and construction. Cooperation between Porto and Gaia The project results from a memorandum of understanding between both municipalities, reinforcing cooperation in joint mobility and urban development initiatives. The crossing will be jointly financed by Porto and Gaia. The authorities highlight that the new pedestrian and cycle bridge could have a significant economic and tourism impact, enhancing the Douro riverfront and creating a new architectural landmark in the region. At the same time, alternative solutions for the former Maria Pia railway bridge, decommissioned since 1991, are still under study.
Source: Adobe Stock Author: Redaction Obligation to declare income abroad Income earned abroad must be mandatorily declared by all taxpayers with tax residence in Portugal. Even if tax has already been paid in another country, this does not remove the obligation to report it in IRS. During the IRS campaign, this rule continues to apply to those who worked remotely for foreign companies, received international pensions or have investments outside the country. The Tax and Customs Authority requires these amounts to be included in the annual return. Annex J and types of income to declare Income earned abroad is declared through Annex J of the IRS Model 3 form. This annex is used to report amounts received outside Portugal and the taxes paid abroad. Several types of income must be declared, including employment income, self-employment income, foreign pensions, bank interest, dividends, property rental income, capital gains and certain cryptoasset income. Correct completion requires indicating the country of origin, gross amount and any tax paid outside Portugal. Double taxation and international rules Income earned abroad may be subject to double taxation, meaning tax is charged in two countries on the same income. To avoid this, Portugal applies international conventions and tax credit mechanisms. Even when tax has already been withheld abroad, income earned abroad must still be declared in IRS. Only afterwards are agreements applied to eliminate or reduce double taxation. Portugal maintains several active treaties that help regulate international taxation and prevent the same income from being taxed twice. Common errors and foreign accounts One of the most common errors in declaring income earned abroad is omitting dividends from foreign brokers, declaring net amounts instead of gross amounts, or failing to correctly indicate tax paid abroad. There are also questions regarding foreign bank accounts. Even with a Portuguese IBAN in some cases, accounts previously opened abroad may need to be declared in Annex J, including IBAN and SWIFT/BIC code where applicable. Correct reporting of income earned abroad is essential to avoid tax corrections and ensure compliance with IRS obligations.
Source: Adobe Stock Author: Redaction Households repaid 8.4 billion euros in 2025 Early repayments on home loans fell by 7% in 2025, reflecting the reduction in interest rates driven by the European Central Bank (ECB). Even so, Portuguese households repaid around 8.4 billion euros to banks before the end of mortgage contracts. According to data released by the Bank of Portugal, this decline comes after several years marked by high levels of early repayments, driven by rising interest rates and extraordinary measures that facilitated early loan repayment. Interest rate cuts reduced incentives for repayment The evolution of early repayments on home loans coincided with a period of monetary easing by the ECB. Between June 2024 and June 2025, interest rates were reduced, contributing to lower mortgage instalments. With lower monthly charges, many households no longer felt the need to repay loans early. In addition, a significant number of clients had already made early repayments in previous years, when interest rates were higher. The values recorded in 2025 are close to those observed in 2022, before the temporary suspension of the early repayment fee, a measure that ended at the end of last year. Despite the reduction in total repayments, the average amount per operation increased from 49.2 thousand euros to 54.6 thousand euros. Total and partial repayments fall Early repayments on home loans aimed at full loan settlement fell by 3.6%, totalling around 7.5 billion euros. Partial repayments recorded a sharper decline, falling to 871 million euros, down 29.7% year-on-year. The figures confirm a trend of market normalisation after the record levels registered in 2023, when households sought to reduce the impact of rising instalments caused by the surge in interest rates. Mortgage renegotiations fall by more than 26% The decline in interest rates also had an impact on mortgage renegotiations. In 2025, the amount of renegotiated credit fell by 26.4%, to 5.1 billion euros. The number of renegotiated contracts followed the same trend, falling by 27% to around 45,500 operations. According to the Bank of Portugal, the reduction in benchmark rates led to lower instalments in variable-rate contracts, reducing the need for renegotiation by customers. In most cases, renegotiations involved only one contractual change. The spread was the most frequently revised condition, representing the main change agreed between customers and financial institutions.
Source: Adobe Stock Author: Redaction Registered unemployment falls in May Registered unemployment in Portugal fell again in May, according to data from the Institute for Employment and Vocational Training (IEFP). In total, there were 274,766 unemployed people registered, 26,139 fewer than in the same month of 2025, representing a year-on-year decrease of 8.7%. Compared with April, the number of people registered with IEFP also fell by 3%, showing an improvement trend in the labour market. The decline in registered unemployment at IEFP is seen across the entire national territory. Unemployment falls across all regions and sectors The reduction in registered unemployment at IEFP was observed in all regions of the country. The North led the declines with -12.3%, followed by the Azores and Madeira, with drops above 9%. In the Algarve, the monthly decline in registered unemployment at IEFP was even more significant, with a 17.3% reduction compared to April. This evolution confirms the improving employment trend in several regions. By economic sectors, registered unemployment at IEFP also fell broadly. The agricultural sector recorded a 15% decrease, the secondary sector 7.6%, and services 1.3%, year-on-year. Job vacancies and labour market evolution At the end of May, IEFP recorded 17,703 job vacancies still to be filled. Despite a slight annual decline, this figure increased compared to the previous month. At the same time, the use of furlough schemes (lay-off) also changed on a monthly basis, according to Social Security data. In May, 4,778 situations were covered, 4.5% fewer than in April, although higher than in the same period last year. Of the total, 2,340 workers were on reduced working hours and 2,438 had their employment contracts temporarily suspended, reflecting different dynamics in the labour market. The number of employers involved also decreased compared to comparable periods. The evolution of registered unemployment at IEFP continues to be one of the main indicators of the health of the labour market in Portugal, in a context of gradual economic adjustment.
Source: Adobe Stock Author: Redaction Economic performance improves Portugal fell three positions in the IMD (International Institute for Management Development) World Competitiveness Ranking, now ranking 40th out of 70 economies. Economic performance was the only pillar showing improvement, reflecting gains in some key indicators of the Portuguese economy. However, the country lost ground in most areas analysed, highlighting structural weaknesses in Portugal’s competitiveness. In the economic performance pillar, Portugal rose seven positions, reaching 35th place. International investment was the main driver, while the domestic economy showed a slight recovery. However, international trade declined, showing uneven performance within this indicator. Business efficiency and government efficiency decline In business efficiency, Portugal fell to 45th place, affected by weaknesses in management, productivity and the labour market. Challenges also remain in company scale, entrepreneurship and training, limiting Portugal’s competitiveness in the medium term. Government efficiency also recorded a significant decline, to 41st place. Despite slight improvements in fiscal policy, the institutional and regulatory framework continues to be seen as unpredictable, constraining investment and business growth in Portugal. Infrastructure and overall position of Portugal Portugal’s best performance remains in the infrastructure pillar, where it now ranks 31st, despite a drop compared to the previous year. Education and technological infrastructure remain the strongest areas within this indicator, supporting part of Portugal’s competitiveness. However, the decline across the main pillars highlights a persistent challenge: transforming resources and talent into higher productivity and innovation. The IMD competitiveness ranking underlines the need for more stable policies and a more efficient economic environment to improve Portugal’s global position.
Source: Adobe Stock Author: Redaction Inflation forecast by the Bank of Portugal The Bank of Portugal (BdP) expects inflation to reach 3.1% this year, with a trend towards returning to values close to 2% in the following years, according to the Economic Bulletin. This development reflects an international context marked by instability in energy markets and the impact of rising commodity prices. According to the analysis, the rise in inflation is largely linked to the increase in oil prices, influenced by the conflict in Iran, which has affected a significant part of global energy supply. This factor has had a direct impact on price developments and inflation dynamics in Portugal. Difference compared to Government projections Government projections point to a more moderate inflation rate, estimated at 2.5% in 2026, according to updated forecasts sent to European institutions. This difference reflects different economic scenarios and varying pressure on prices. The Bank of Portugal highlights that the current context remains affected by external factors, particularly developments in energy markets and geopolitical tensions, which may prolong inflationary pressure in the short term. Impact of ECB monetary policy The Governor of the Bank of Portugal defended the European Central Bank (ECB), stressing that interest rate increases aimed to prevent an inflationary spiral. The decision was considered consensual in a context of broad-based price increases. Inflation is not limited to energy, also extending to fertilisers and other goods and services, increasing the risk of spillover effects in the economy. The BdP considers monetary policy essential to stabilising inflation expectations. Geopolitical conflict and economic impact The impact of the Middle East conflict on the economy depends on its duration and evolution. A potential international agreement to reopen the Strait of Hormuz is seen as a positive factor, with the potential to ease pressure on energy markets. However, even with a swift resolution, a return to normality could take several months due to damage to energy infrastructure and the time required to fully resume production and distribution. The Bank of Portugal warns that economic effects will be gradual and dependent on geopolitical stability.
Source: Adobe Stock Author: Redaction Portugal strengthens position in hotel investment Portugal is establishing itself as one of the main destinations for hotel investment in Europe, benefiting from tourism dynamism and growing international demand. The country currently ranks 4th in Europe, behind only Spain, Italy and the United Kingdom, according to the European Hotel Investor Intentions Survey 2026 by CBRE. The hotel sector in Portugal continues to be driven by factors such as positive operational performance, the diversity of tourist destinations and the strong attractiveness of major cities. Lisbon also stands out as one of the most sought-after cities by investors, reaching 6th place in the European ranking of the most attractive cities for hotel investment. On an Iberian level, Portugal plays a decisive role in the high concentration of investment intentions, reinforcing the weight of the Iberian Peninsula in the European hotel investment landscape. Investment strategies gain new momentum The CBRE study indicates that more than 90% of investors plan to maintain or increase their exposure to the hotel sector in 2026, reflecting continued confidence in the market. Around 31% of investors even expect to significantly increase hotel investment. In terms of strategies, value-add approaches continue to lead, representing 53% of preferences. At the same time, interest in opportunistic strategies is growing, now reaching 25% of investment intentions, while core strategies are losing relevance due to limited availability of prime assets and greater investor selectivity. High-end hotel segments remain the most sought after. Luxury hotels lead with 53% of preferences, followed by upper-upscale segments with 44%, reinforcing the focus on higher-quality and higher-yield assets. Positive outlook for 2026 in Portugal According to Gilberto Martins, Head of CBRE Portugal for the hotel sector, the first months of 2026 have already recorded a higher investment volume than the whole of 2025, signalling a particularly strong year for the sector. He also highlights a robust pipeline of transactions expected in the coming months, reinforcing confidence in the hotel investment market in Portugal. The outlook suggests that 2026 could become a new record year for hotel investment in the country, supported by continued tourism growth and the attractiveness of national hotel assets.
Source: Adobe Stock Author: Redaction Fiscal model strengthens control of global minimum corporate tax The Government has approved the reporting model for complementary tax information (GIR – Global Information Return), a tool that allows the Tax and Customs Authority (AT) to verify compliance with the global minimum corporate tax by large multinationals operating in Portugal. The document includes an example of the required structure, essential to ensure the correct application of the 15% minimum rate. The order published in the Official Gazette establishes Model 63, which defines the format of the declaration required for the calculation and control of the complementary tax. The information is submitted electronically, via an XML file on the Tax Portal, and is considered valid at the moment of submission. Extended deadline and complementary tax rules The global minimum tax regime (IRC minimum global) also provides for the cancellation of the filing obligation when the information has already been submitted by the ultimate parent entity or a designated filing entity, within a framework of international cooperation between tax administrations. In such cases, central filing may apply. In June, the Government decided to extend the deadline for submitting the global minimum corporate tax declaration from 30 June to 30 September, giving multinational companies with turnover above 750 million euros more time. The measure applies to fiscal years ending between 31 December 2024 and 31 March 2025. Implementation of the global minimum tax in Portugal The 15% global minimum tax rate was approved in 2024 but only entered into force this year. In Portugal, the tax obligation applies only to large multinational groups that meet the size criteria defined under the global minimum tax regime. According to sector data, only one US group operating in the country currently meets the turnover requirements, reflecting the limited number of companies affected. The measure is part of an international tax reform aimed at increasing the effective taxation of multinationals and reducing base erosion. The global impact of the minimum tax is significant, with international estimates pointing to a substantial increase in corporate tax revenues worldwide, reinforcing the importance of coordinated implementation between countries.
Source: Adobe Stock Author: Redaction Why should real estate agencies integrate credit intermediation into their business? A more demanding and selective real estate market The real estate sector has changed profoundly. Access to credit now depends on stricter criteria from financial institutions and a detailed analysis of the client’s financial profile, which directly influences the viability of any purchase. In this context, real estate agencies can no longer focus only on the property and must consider, from the very first moment, their clients’ real financing capacity. The importance of qualifying the client from the first contact For many years, it was common to proceed with viewings and sales processes without prior financial validation. This often resulted in wasted time, misaligned expectations and frustration for all parties involved. Today, this approach has become increasingly less efficient. Qualifying the client early in the process makes it possible to understand their real investment ceiling, avoiding unviable sales journeys and ensuring agents carry out much more productive viewings. The strategic role of credit intermediation More than just helping to obtain financing, credit intermediation works as a strategic partner that analyses, compares and negotiates solutions with financial institutions. In Portugal, credit intermediation is a regulated activity by the Bank of Portugal, requiring registration and compliance with specific requirements, and it is common for real estate agencies to rely on partnerships with duly authorised intermediaries. This specialised support makes it possible to find the most suitable conditions for each buyer’s profile, increasing financing approval rates. For real estate agencies, this translates into greater procedural security, a higher success rate and smoother transactions, from initial qualification through to the signing of the CPCV (Promissory Purchase and Sale Agreement). From dispersion to commercial efficiency In a competitive market, time is the most critical resource. Real estate agencies that do not yet integrate structured financial analysis into their daily operations end up investing resources in clients who do not have real purchasing capacity. Integrating this service transforms the scenario: instead of simply “showing houses”, the focus shifts to building a qualified process where each viewing has a clear purpose and a much higher probability of resulting in a deal. Technology and the evolution of the real estate process Digitalisation has accelerated this paradigm shift. Today, there are tools that allow information to be centralised, the credit process to be monitored and tasks that were previously time-consuming and fragmented to be automated. Platforms that integrate the financing process with real estate management in a single ecosystem enable teams to follow the client more efficiently, reduce operational errors and ensure transparency throughout the transaction cycle. Note: eGO CRM Credit Intermediation is an example of a solution developed for this specific context. Integrating credit intermediation into the real estate business is no longer a differentiating extra. It is increasingly a natural evolution for agencies that aim to increase efficiency, improve the client experience and enhance business profitability.
Source: Adobe Stock Author: Redaction Risks to economic growth in Portugal The European Stability Mechanism (ESM) identifies several risks to Portugal’s economic growth, highlighting the country’s exposure to both external and internal factors. Key challenges include energy dependence, high housing prices, delays in PRR reforms and the impact of extreme weather events. According to the ESM report, the Portuguese economy is expected to remain resilient, but it continues to be vulnerable to external shocks. Instability in energy markets and international geopolitical tensions may push inflation higher and weigh on economic growth. Energy, housing and external pressure One of the main issues highlighted in the ESM report is Portugal’s energy dependence. This vulnerability exposes the country to fluctuations in energy prices, with direct effects on the cost of living and economic competitiveness. At the same time, the housing market is identified as another risk factor. High housing prices continue to make access to homes more difficult and increase social pressure, especially in major urban areas. The ESM also notes that delays in implementing PRR-related reforms and investments may limit economic growth potential, reducing the expected impact of EU funds on the Portuguese economy. PRR, reforms and structural challenges The report stresses the importance of ensuring effective implementation of the PRR, arguing that investments must be accompanied by consistent structural reforms. The institution warns that delays in execution could undermine the positive effects on the Portuguese economy. In addition, long-term challenges such as population ageing, climate change and rising defence spending are highlighted. These factors add pressure to public finances and require greater caution in fiscal policy. The ESM recommends that Portugal’s fiscal policy remains prudent, directing defence spending towards projects with positive impacts on the wider economy and job creation. Financial stability and outlook Despite the risks identified, the European Stability Mechanism highlights that the Portuguese economy has performed well, with solid growth, easing inflation and improving employment. Public debt has also followed a downward path, supported by budget surpluses. The banking sector is described as a strength, with high levels of solvency and liquidity. The ESM also considers that market stress risks remain limited in the short term. Even so, the report stresses that Portugal remains exposed to external and internal shocks, making it essential to maintain fiscal discipline, speed up the PRR and strengthen the economy’s resilience to structural challenges.
Source: Adobe Stock Author: Redaction A new framework for the housing market The new housing tax package approved by the Government comes in a context of strong pressure on access to housing in Portugal. Rising house prices, high rental costs and expenses associated with mortgage credit make it necessary to create measures that stimulate supply and facilitate access to properties. This set of tax changes aims to act on several fronts, from the purchase and sale of properties to renting and renovation, through adjustments in taxes such as IRS, IMT, VAT and Stamp Duty. However, the real impact of these measures depends on how they are implemented and on consumers’ ability to make informed financial decisions. Tax benefits in rental housing One of the most relevant changes relates to support for tenants. The possibility of deducting rents under IRS remains, but with an increase in the annual limit to 1,000 euros for residential lease contracts. To benefit from this deduction, it is essential that the contract is properly registered on the Tax Authority portal and that rent receipts are issued. This measure may represent a significant relief for households living in rented accommodation, especially in a context where housing represents a large share of monthly income. In parallel, the importance of regularising contracts is reinforced, allowing tenants to report rental agreements directly to the Tax Authority if landlords have not done so in time. Capital gains and reinvestment incentives Another relevant change concerns the taxation of capital gains from the sale of primary and permanent residences. Until now, there was an IRS exemption when the amount obtained was reinvested in a new primary and permanent residence. With the new framework, this exemption may also apply to situations where the sale proceeds are reinvested in properties intended for rental housing at affordable or moderate rents, provided that the legal conditions are met. This change aims to encourage the availability of properties in the rental market, promoting a better balance between supply and demand. Buying a home with lower initial costs On the purchase side, the tax package introduces measures that may reduce the initial costs associated with buying a primary residence, especially in properties considered cost-controlled. In certain situations, there may be an IMT exemption on the first purchase, as well as additional benefits in Stamp Duty. These reductions have a direct impact on the initial stage of the buying process, which is often one of the biggest barriers for families looking to purchase a home. The real impact depends on financial decisions Despite the opportunities created by these tax measures, their impact on consumers’ lives is not automatic. The evolution of the housing market will continue to depend on factors such as income stability, access to credit and households’ ability to plan financially. Thus, more than a set of tax benefits, this package represents a change in framework that requires careful analysis. Decision-making must be considered, taking into account each household’s reality and the long-term financial commitments associated with housing.
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