Association points to bureaucracy and lack of oversight as the main barriers to the poor performance of affordable rental housing in Portugal.
Source: Adobe Stock
Author: Redaction
Rental programme with low uptake
The Lisbon Association of Landlords considers that bureaucracy and the complexity of processes are undermining the results of the affordable rental housing programme in Portugal. According to the organisation, the difficulty in submitting and approving applications, both from landlords and tenants, has discouraged participation in the scheme.
At issue is the Rental Support Programme (PAA), created in 2019 with the aim of increasing the supply of more affordable housing, through tax incentives such as exemptions in IRS, IRC and IMI for landlords who charge rents below the market median.
Bureaucracy and weak programme participation
According to data referred to regarding the programme, there are around one thousand active contracts since its launch, a figure considered far below initial expectations. The goal of reaching a significant share of the market has fallen short, representing only a small percentage of the rental housing sector in Portugal.
The association argues that this result mainly reflects the administrative complexity of the programme, which includes lengthy and unintuitive processes. From its perspective, landlords seek stability and predictability in the market more than isolated tax benefits, pointing to trust as a key factor for participation.
Oversight, data and market impact
Another critical issue relates to programme oversight. Despite the tax exemptions granted, there are concerns about monitoring compliance with the rules, particularly in cases where rents may exceed the defined limits. The lack of more effective control mechanisms raises doubts about the overall effectiveness of the scheme.
The absence of automation in tax information processing is also highlighted, particularly in the completion of IRS declarations related to rental income, which requires additional steps from taxpayers, even though the information is already available to the tax authorities.
In addition, the suspension of essential statistical data on the rental market makes it harder to track updated trends in rents. In a context of strong pressure on housing prices in Portugal, the lack of up-to-date information and the bureaucracy associated with support schemes are seen as additional obstacles to the development of affordable rental housing.
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