Source: Adobe Stock Author: Redaction What is Porta 65 Youth Porta 65 Youth is a public rental housing support programme aimed at young people aged between 18 and 35. In couples, it is possible to apply provided one member is up to 37 years old and the other does not exceed 35 years old, in compliance with Porta 65 Youth rules. This Porta 65 Youth support consists of a monthly rent contribution, calculated based on the contractual rent, household income and rent burden rate. The Porta 65 Youth programme is managed by IHRU – Institute for Housing and Urban Rehabilitation. Applications for Porta 65 Youth are submitted online via the Housing Portal and can be made with or without an existing rental contract, although in the latter case it must be submitted later within the deadline defined in the Porta 65 Youth regulations. How Porta 65 Youth works Porta 65 Youth grants a monthly financial support for 12 months, corresponding to a percentage of eligible rent. The support can be renewed annually, up to a maximum of five years, consecutive or non-consecutive, under Porta 65 Youth rules. To access Porta 65 Youth, the following requirements must be met: Age within the limits defined by Porta 65 Youth Rental contract or promissory contract Permanent residence in the property Rent burden within the established limits Household income within legal limits No ownership of another residential property No outstanding debt from previous Porta 65 Youth or housing support programmes The rental contract under Porta 65 Youth must have a minimum duration of 12 months or be renewable. The property must also be suitable for the household size according to typology limits defined in Porta 65 Youth regulations. The support calculation is based on the lower value between actual rent and the maximum reference rent for the area, applying a percentage defined by scoring brackets assigned in the Porta 65 Youth application. Porta 65 Youth application Applications for Porta 65 Youth are made exclusively online via the Housing Portal. The process requires authentication with tax number and Tax Authority password, Mobile Digital Key or Citizen Card. To submit a Porta 65 Youth application, the following data are required: Tax number (NIF) and Social Security number (NISS) of all household members IBAN/NIB for payment of the support Rental contract or promissory contract Income tax declaration or proof of income Identification of applicants Porta 65 Youth allows applications without a contract, but the document must be submitted later within the legal deadline after approval or submission, as provided in the rules. After submission, Porta 65 Youth is assessed within approximately 45 days. Results are published on the Housing Portal and beneficiaries receive the support via bank transfer. Additional rules and framework for Porta 65 Youth Porta 65 Youth also defines rent limits by geographic area and housing typology criteria, adjusted to household size. The support may include increases in specific situations, such as housing in historic areas, single-parent families or households with dependents or disabled members. The final value depends on the score obtained, combining income, financial effort and housing conditions. The system is periodically reviewed and subject to current IHRU regulations.
Source: Adobe Stock Author: Redaction Household debt reaches 71.5% Household debt rose again at the beginning of 2026, reaching 71.5% of disposable income. This means that, for every 100 euros of income, 71.5 euros are associated with debt. This increase in household debt confirms the reversal of the deleveraging trend seen in recent years, reflecting greater pressure on household budgets and reduced financial margin after taxes and credit repayments. BdP data shows rising debt According to the Bank of Portugal (BdP), household debt has been increasing since the end of 2024. In the first quarter of 2025 it stood at 69.65%, rising to 71.02% at the end of the same year and now reaching 71.5%. In March 2026, total non-financial sector debt increased by 5.4 billion euros, to 868.1 billion euros. Within this total, household debt continued to be driven mainly by housing credit, which represents the main component of private debt. The BdP also notes that the increase in household debt is associated with stronger bank financing, in a context where housing credit continues to be the main driver of debt growth. Financial pressure and increased risk The rise in household debt has been accompanied by warnings from entities such as DECO, which highlight the impact of rising debt on savings capacity and household financial stability. With household debt at higher levels, vulnerability to economic shocks also increases, such as interest rate changes or income loss. Given this trend, the Bank of Portugal stresses the importance of prudent credit management, in a context where household debt continues to follow an upward trajectory in Portugal.
Source: Adobe Stock Author: Redaction BdP warns of margin decline The Bank of Portugal (BdP) is concerned about the evolution of banks’ margins in mortgage lending, following an audit of the main national banks. The supervisor concluded that spreads have fallen to around one third over the past decade, reflecting a structural decline in the profitability of these operations. In 2024, nearly 90% of new contracts had commercial rates below 1%, a level considered historically low and raising questions about the balance between risk and profitability in the financial system. Spreads falling and rising competition The reduction in banks’ mortgage lending margins is linked to a context of strong competition between financial institutions, higher system liquidity and the growing role of credit intermediaries. According to the BdP, the average spread on new contracts stood at 0.89 percentage points in 2024, compared with significantly higher values recorded in 2014. This evolution also reflects changes in public policies and market structure, including temporary incentives and greater customer mobility. Households’ preference for mixed-rate contracts has also contributed to this dynamic, changing the risk profile and profitability of mortgage lending. Audit reveals banking practice failures The inspection carried out by the supervisor involved institutions representing more than 70% of the market and identified 72 deficiencies, with different levels of impact. Most were considered moderate, while some were classified as relevant for risk assessment. The BdP pointed to weaknesses in the formalisation of pricing policies and in the way banks incorporate all costs into decision-making tools. According to the supervisor, these shortcomings indicate only a moderate level of compliance with required practices. These findings will be taken into account in the annual supervisory review process, potentially influencing capital requirements for institutions. Regulatory pressure and sector impact The evolution of banks’ mortgage lending margins raises concerns about the sustainability of sector profitability, particularly in a context of high competition and compressed spreads. The Bank of Portugal stresses that banks must correct the identified deficiencies and implement action plans to improve internal processes. Otherwise, they may face penalties under prudential supervision. At the same time, the structural reduction in spreads continues to reflect a more competitive market, but also one under greater pressure in terms of financial margins, with a direct impact on institutions’ strategies and the stability of the banking system.
Source: Adobe Stock Author: Redaction Accident-at-work pensions and IRS Accident-at-work pensions granted by the General Retirement Fund (CGA) to Public Administration workers are subject to IRS, even when they have an indemnity nature. The Tax Authority (AT) clarifies that accident-at-work pensions are included in income subject to IRS, excluding the exemption applied to other compensation for bodily injury. This understanding applies to situations covered by the Public Administration accident-at-work scheme, where accident-at-work pensions continue to be taxed under IRS, including amounts paid retroactively. Tax regime of CGA pensions According to the AT, the IRS exemption provided for some bodily injury compensation does not apply to CGA accident-at-work pensions. The IRS Code provides exemptions, but these do not cover the specific Public Administration service accident regime. Thus, accident-at-work pensions granted by the CGA are considered income subject to IRS, reinforcing the distinction between the general regime and the Public Administration regime. This interpretation confirms that Public Administration accident-at-work pensions have their own tax framework. Retroactive payments and IRS taxation In the case of accident-at-work pensions with retroactive payments, the AT explains that amounts may be allocated to the years to which they relate, reducing the IRS impact. Alternatively, amended tax returns for previous years may be submitted. However, accident-at-work pensions remain subject to IRS, even when they include accumulated payments over several years. This framework ensures that the taxation of accident-at-work pensions follows specific rules for time allocation. Public sector and tax impact The IRS taxation of accident-at-work pensions in the Public Administration reinforces the need to distinguish between general compensation and CGA benefits. Accident-at-work pensions remain subject to IRS under the special Public Administration regime. This clarification by the AT on accident-at-work pensions helps standardise tax interpretation and avoid doubts in income reporting, especially when retroactive payments and long-term situations are involved.
Source: Adobe Stock Author: Redaction Euribor falls across main maturities The Euribor recorded a decline across the three-, six- and 12-month maturities, reinforcing the adjustment trend of the Euribor in interbank markets. The three-month Euribor rate fell to 2.190%, remaining below the six-month Euribor and the 12-month Euribor. The evolution of the Euribor continues to be closely monitored, especially in mortgage lending. The decline in the six-month Euribor is particularly relevant, as this maturity is currently the most used in Portugal in variable-rate mortgage contracts. The six-month Euribor stood at 2.446%, reflecting a decrease compared to the previous session and confirming the downward movement of the Euribor. Six-month Euribor leads mortgage lending The six-month Euribor maintains the largest weight in the mortgage market in Portugal, representing 39.41% of the stock of loans for permanent owner-occupied housing with a variable rate. This weight reinforces the importance of Euribor developments in the direct impact on mortgage payments. The 12-month Euribor fell to 2.722%, while the three-month Euribor dropped to 2.190%. These movements show a general decline in the Euribor, although with different paces across maturities. Overall, the Euribor continues to reflect market expectations regarding European monetary policy. ECB and impact on Euribor evolution The evolution of the Euribor is directly linked to the decisions of the European Central Bank, which has kept key interest rates unchanged in recent monetary policy meetings. This stability contributes to the recent behaviour of the Euribor across the main maturities. Despite the ECB’s maintained rates, the market remains attentive to possible changes in monetary policy, which could again influence the Euribor in the coming months. The Euribor trajectory therefore remains dependent on economic expectations and inflation developments in the euro area.
Source: Adobe Stock Author: Redaction European Union considers joint debt The European Union (EU) does not rule out issuing joint debt to address new crises, replicating the model used after the Covid-19 pandemic. According to European Commissioner for the Economy Valdis Dombrovskis, issuing joint debt may be an available tool, but the EU stresses that this mechanism has significant costs for Member States. The European official highlighted that EU joint debt is not free, as it implies the payment of future interest by the countries involved. The discussion comes in a context of rising public spending in the EU, especially in defence, energy and pensions. Brussels assesses European financing The issuance of EU joint debt was analysed at a meeting of finance ministers, where ways to finance new investment needs without compromising fiscal sustainability were discussed. The analysis was based on a report by the International Monetary Fund warning of rising public spending in Europe up to 2040. The study suggests a combination of structural reforms, fiscal adjustments and possible recourse to EU joint debt to finance strategic areas such as defence, energy and innovation. The European Commission has already used this mechanism in the Next Generation Recovery Fund and in support programmes for Ukraine and European defence, reinforcing its viability in crisis scenarios. EU debt and future challenges According to projections by the European Court of Auditors, EU debt could exceed €900 billion in 2027, a significant increase compared to levels prior to the Recovery Fund. This growth also implies a sharp rise in interest costs in the next European budget. EU finance ministers recognise that fiscal space in Europe is limited and that public investment alone will not be enough to address defence, energy transition and competitiveness challenges. Countries such as Spain and Italy support the use of EU joint debt to finance European public goods, while other Member States, such as Germany and the Netherlands, remain cautious about this solution.
Source: Adobe Stock Author: Redaction Loan moratoria ease households and companies Loan moratoria created following severe weather in several regions of the country protected more than one billion euros in loans for companies and households. According to Banco de Portugal, the loan moratorium was applied to 1,243 companies, covering 651.8 million euros, and to 5,613 individuals, with 411.3 million euros in credit. In total, the loan moratorium exceeded one billion euros. Among individuals, most of the loan moratorium amount was associated with housing credit, representing 95.1% of the total. In the municipalities covered, the loan moratorium corresponded to 1.5% of eligible housing credit. Companies and sectors most exposed to moratoria In companies, the loan moratorium mainly affected micro, small and medium-sized enterprises, which accounted for 92.8% of the total amount. Large companies had a reduced weight, with only 7.2% of the total loan moratorium. Loan moratoria were directed at companies operating in municipalities affected by the state of calamity, declared after Storm Kristin, which hit several regions of the country. Estimated losses caused by the severe weather exceed 5.3 billion euros. Manufacturing industry concentrates largest impact The manufacturing industry was the most exposed sector to the loan moratorium, with 262.9 million euros, representing around 40% of the total. Overall, the loan moratorium played an important role in supporting the financial recovery of households and companies, helping to mitigate the impact of severe weather in the most affected regions and ensuring greater stability in bank credit.
Source: Adobe Stock Author: Redaction Housing tax package published The housing tax package was published in the Diário da República and introduces a set of tax measures for the housing sector. The objective of the housing tax package is to increase supply and boost investment in the real estate market. Among the main changes of the housing tax package is the removal of the 12-month residence requirement to maintain the 6% VAT rate on primary housing. According to the decree, tax benefits become more flexible, reducing penalties and adjusting VAT rules for construction and renovation. 6% VAT on construction and renovation The housing tax package maintains the reduced VAT rate of 6% on construction and renovation of properties intended for primary and permanent residence or rental housing. The housing tax package establishes that there will be no refund of the tax benefit if the residence ceases to be permanent within 12 months. To benefit from the 6% VAT, the housing tax package sets that properties must be sold within a maximum of 24 months after the occupancy licence, with an explicit reference in the purchase deed. Works covered by the housing tax package include licensing between 2025 and 2029. The 6% VAT under the housing tax package comes into effect from 1 July 2026, with phased implementation rules. Rental and income tax benefits The housing tax package includes measures reducing income tax and corporate tax on rental income, applicable to moderate rents of up to around 2,300 euros. The housing tax package also provides reduced tax rates for landlords entering rental agreements within these limits. Among the measures of the housing tax package is the gradual increase of rent deductions in income tax, as well as the exemption of capital gains taxation when reinvested in rental housing. The housing tax package also creates the Simplified Affordable Rental Scheme, with rents calculated based on the municipal median, reinforcing the role of the housing tax package in market regulation. Real estate investment incentives The housing tax package also introduces Investment Contracts for Rental Housing, with tax benefits of up to 25 years. The housing tax package includes exemptions from property transfer tax, reductions in municipal property tax and incentives for construction and renovation of rental properties. According to the decree, the housing tax package aims to stimulate private investment and increase housing supply. Most measures of the housing tax package enter into force in phases, with retroactive effects from 2026 in several components. The housing tax package is presented as a structural response to the housing crisis, seeking to balance tax incentives and increased supply in the Portuguese real estate market.
Source: Adobe Stock Author: Redaction Deadline for the first IMI instalment is ending The deadline for paying the first instalment of IMI is coming to an end and property owners have only a few days left to meet this tax obligation. Under normal conditions, IMI must be paid by 31 May, but in 2026 this deadline for the first instalment of IMI is automatically moved to 1 June, as the original date falls on a Sunday. After receiving the tax notice or checking the IMI amount on the tax authority portal, property owners must ensure payment is made within the set deadline. IMI applies to housing, land and other properties, and is one of the most relevant annual taxes for those who own real estate assets in Portugal. IMI payment brackets in 2026 IMI payment depends on the total tax amount. When IMI is below 100 euros, payment is made in a single instalment, which this year must be settled by 1 June. If IMI is between 100 and 500 euros, the amount is split into two instalments. The first IMI instalment must be paid in early June, while the second can be settled by the end of November. For IMI amounts above 500 euros, the tax is divided into three instalments throughout the year: June, August and November. When IMI is below 10 euros, there is no charge from the Tax Authority. This IMI bracket system allows the payment to be adjusted to the amount due, making financial management easier for property owners. IMI exemptions and calculation in Portugal Not all property owners pay IMI in Portugal, as there are several exemption situations provided by law. In some cases, primary permanent housing may benefit from temporary exemption, especially when the property’s taxable value is below certain thresholds. There are also IMI exemptions for lower-income households, as well as for specific situations related to long-term rental housing or older rental regimes. These conditions allow IMI to be reduced or eliminated in certain cases. To help with planning, many property owners use IMI simulators, which allow them to calculate the amount payable based on the property, municipality and applicable local tax rates. IMI varies depending on location and property type, so it is essential to understand the rules to avoid surprises in the annual budget.
Source: Adobe Stock Author: Redaction Bank of Portugal tightens mortgage credit rules The debt-to-income ratio for mortgage credit is expected to fall from 50% to 45%, according to the new guidance from the Bank of Portugal (BdP), which has already started communicating the measure to banks. This change in mortgage credit aims to strengthen lending criteria and prevent rising household debt. The debt-to-income ratio for mortgage credit, which measures the weight of loan payments in net income, will therefore become stricter. With this change in mortgage credit, a household earning 2,000 euros will have a borrowing limit of 900 euros instead of the previous 1,000 euros. The BdP still maintains exceptions that allow banks to exceed the debt-to-income ratio for mortgage credit in justified situations, reaching up to 60% subject to supervisory approval. Impact on mortgage credit access The reduction of the debt-to-income ratio for mortgage credit is expected to impact the approval of new loans, although less than a more severe ten-percentage-point cut. The aim of the measure in mortgage credit is to reinforce prudence without excessively restricting access. Recent data shows that most new mortgage credit contracts are already below the 50% debt-to-income threshold. Even so, the revision of the mortgage credit debt-to-income ratio may exclude some applicants, particularly young people and households outside major urban centres. Sector sources estimate that between 10% and 15% of current mortgage credit could stop being approved under the new criteria, in a context where housing supply remains limited and prices remain high. Banking sector considers measure adequate Banks consider the revision of the mortgage credit debt-to-income ratio to be an adequate measure, despite the expected impact on access to financing. Major banks indicate they will follow the Bank of Portugal’s guidance on mortgage credit without objection. The sector acknowledges that mortgage credit continues to show low levels of default, but admits that the new debt-to-income ratio may reduce the number of households eligible for financing. Still, the measure is seen as important for ensuring greater stability in the mortgage credit market. In a context of inflation, rising Euribor rates and economic uncertainty, tightening the debt-to-income ratio in mortgage credit is seen as a way to prevent future risks in the financial system and household indebtedness.
Source: Adobe Stock Author: Redaction Avenida da Liberdade in global luxury Avenida da Liberdade consolidates itself as a benchmark in luxury retail, with strong pressure on luxury stores on Avenida da Liberdade. In 2025, rents reached around €1500/m²/year, according to the “Global Luxury Retail Outlook” report. Despite recent stability, the market for luxury stores on Avenida da Liberdade is expected to grow above the European average in 2026, driven by international demand. The attractiveness of luxury stores on Avenida da Liberdade is linked to high-end tourism and the concentration of high-net-worth individuals in the city. Demand exceeds supply of luxury stores The increase in demand for luxury stores on Avenida da Liberdade is putting pressure on the market, as available supply is limited. Luxury brands on Avenida da Liberdade aim to secure space in one of Europe’s most exclusive locations, even at high costs. The evolution of luxury stores on Avenida da Liberdade shows sustained demand growth, with brands willing to pay higher rents and even entry fees to secure strategic positions. This dynamic reinforces the weight of luxury stores on Avenida da Liberdade in the European premium retail landscape. Luxury hospitality boosts the Avenue The expansion of luxury hospitality is directly linked to the performance of luxury stores on Avenida da Liberdade. The opening of new high-end hotels is expected to increase visitor flows and, consequently, demand for luxury stores on Avenida da Liberdade. According to experts, limited supply further restricts access to luxury stores on Avenida da Liberdade, creating a highly competitive market. The entry of new international brands is expected to intensify pressure on luxury stores on Avenida da Liberdade, consolidating Lisbon as a leading destination in the premium segment.
Source: Adobe Stock Author: Redaction Hotel and retail dominate real estate investment Commercial real estate investment in Portugal reached €911 million in the first quarter of 2026, with the hotel and retail sectors clearly leading the real estate market. Together, these two segments accounted for more than 70% of real estate investment, reinforcing their central position in commercial real estate. Hotels stood out in real estate investment , growing 130% year-on-year and accounting for 39% of total volume. Retail real estate accounted for 37% of investment, driven by large-scale transactions in the national market. Retail and real estate investment dynamics In the retail real estate segment, more than half of the investment was linked to the sale of stakes in large-scale commercial assets, reflecting strong liquidity in commercial real estate. This movement helped consolidate the weight of retail in total real estate investment. On the other hand, the office real estate sector performed much more weakly, representing only 5% of real estate investment in the quarter. This 53% decline year-on-year reflects a mismatch between asking prices and offers in the real estate market, slowing down transactions. Competition from other European markets offering more attractive returns has also been putting pressure on office real estate investment in Portugal, diverting capital elsewhere. Data centres and new real estate assets Data centres appear for the first time with significant weight in Portugal’s real estate investment, reaching around 5% of the total. This segment is beginning to gain space in commercial real estate, following international trends in asset diversification. Despite growing demand, the logistics real estate segment remains constrained by the limited supply of prime assets available, restricting growth in this area. However, investor interest remains strong. Investors and real estate market resilience Real estate investment in Portugal in Q1 was driven mainly by institutional investors and private equity funds, which together accounted for around 64% of deployed capital. Foreign real estate investment also played a strong role, with the US, Spain and France standing out. The Portuguese real estate market remains one of the most resilient in Southern Europe, supported by the stability of real estate investment and the country’s structural attractiveness. The increase in average transaction ticket size further strengthens market dynamism. The evolution of real estate investment remains linked to macroeconomic conditions and interest rates, but the sector maintains a positive outlook for the coming quarters, supported by steady demand in commercial real estate.
Deutsch
Português
English
Français
Español
Nederlands
Русский
中文(简体)
