Source: Adobe Stock Author: Redaction European pressure on housing taxation The European Commission advocates a review of housing taxation in Portugal as a response to the shortage of supply and the high number of vacant or underused homes. The recommendation involves updating property taxable values, which could lead to an increase in the Municipal Property Tax (IMI). The main objective is to make the ownership of unused properties more costly, encouraging owners to place these homes on the rental or sales market. This approach also aims to improve the efficiency of the housing market and address the imbalance between supply and demand, especially in urban coastal areas. Higher IMI and a shift in tax policy According to EU guidance, Portugal should move from a tax system focused on transaction taxes, such as IMT, towards a model based more on recurring property taxes. This change would be supported by an update of taxable property values, which in many cases do not reflect current market prices. The European Commission believes this change could contribute to greater residential mobility while reducing the incentive to keep properties outside the housing market. In parallel, it suggests the creation of temporary support for more vulnerable families, in order to mitigate the social impact of a potential tax increase. Structural pressure on Portugal’s housing market Brussels highlights that Portugal has recorded one of the highest cumulative increases in house prices over the past decade, with values more than doubling since 2015. This growth has worsened housing access difficulties, particularly in major urban areas. The report also notes a significant number of properties that are not used as primary residences, including vacant or dilapidated homes. This factor contributes to structural imbalances between supply and demand in the housing market. Despite increased investment in social housing supported by European funds, data points to significant delays in project execution, including under the Recovery and Resilience Plan. The European Commission therefore argues that, in addition to public investment, it is essential to strengthen the role of the private sector and alternative models, such as cooperative housing, in order to increase supply and improve housing access.
Source: Adobe Stock Author: Redaction Lisbon at the top of least affordable capitals Lisbon is, in 2026, the least affordable capital in Europe, according to a study comparing 37 capitals based on cost of living and salaries. Despite an average salary of €1,343, monthly expenses are around €1,631, representing about 127% of average income. This gap places the Portuguese capital at the top of the least affordable cities to live in. The study also indicates that housing is the main pressure factor on the cost of living in Lisbon, significantly reducing the city’s affordability. Housing weighs on household budgets Housing in Lisbon plays a decisive role in the monthly budget . A 45 m² studio with associated expenses can cost around €1,226 per month, a value that represents more than half of the average salary and strongly pressures residents’ financial capacity. Rent alone can consume more than 91% of average income, before other essential expenses such as food, transport or basic services. This imbalance explains why the cost of living in Lisbon is considered one of the highest compared with salaries. For families, the situation remains equally challenging: monthly costs represent 95.8% of combined household income, leaving little room for savings or unforeseen expenses. European comparison and social impact Among the capitals analysed, Lisbon ranks last in terms of affordability, followed by Tirana and Athens, where high pressure on disposable income is also recorded. At the opposite end, Brussels stands out as the most affordable capital, with costs representing only 49% of the average salary, followed by Copenhagen and Bern. The study reinforces that housing pressure is a common factor across several European capitals, but it is particularly intense in Lisbon, where the imbalance between salaries and costs continues to increase the risk of financial and social exclusion. Despite the city’s attractiveness to international workers and digital nomads, the continuous rise in the cost of living keeps Lisbon among the most demanding capitals in Europe for permanent residents.
Source: Adobe Stock Author: Redaction Uneven wage growth in the private sector Private sector wages in Portugal have recorded average increases in recent years, with a positive impact on the recovery of purchasing power following the inflationary period of 2022 and 2023. However, the analysis by the Bank of Portugal (BdP) shows that wage developments have not been uniform. According to Social Security microdata, most wage increases were concentrated in the lower income brackets, largely due to the annual adjustment of the minimum wage. This dynamic reinforces the importance of the minimum wage in Portugal’s wage structure. In nominal terms, private sector wages grew by 6.4% in 2023, 6.2% in 2024 and 5.6% in 2025. In real terms, growth stood at 1.5%, 3.4% and 3.1% in the same years, reflecting more moderate gains in purchasing power. Minimum wage explains wage compression The BdP identifies strong heterogeneity in wage evolution, with stronger growth in lower income levels. This trend is directly linked to minimum wage updates, which act as a central reference in wage formation. A significant share of private sector workers earns close to the minimum wage, meaning any increase has a broader impact on the lower end of the wage distribution. In 2025, for example, the bottom 10% of earners saw average wage increases above 8%. As income levels rise, increases become progressively smaller, with the top 10% of earners recording average rises of around 5%. This pattern contributes to wage distribution compression, with salaries becoming increasingly closer. When total pay is analysed, including bonuses and other components, the concentration of increases around the minimum wage is less evident due to the weight of additional remuneration. Lower inequality, closer to the minimum wage The Bank of Portugal concludes that wage inequality in the private sector has declined over the past 15 years. This reduction was more pronounced up to the pandemic, driven by minimum wage increases and wage convergence at higher levels. In the post-pandemic period, the decline in inequality continued but at a more gradual pace, mainly concentrated in the upper half of the wage distribution. The Kaitz index, which measures the ratio between the minimum wage and the median wage, rose to 91% in 2025, compared to 87% in 2019, reflecting greater proximity between the two values. Portugal stands out in the euro area as the country with the lowest wage dispersion, highlighting strong compression at lower wage levels. According to the BdP, this trend raises questions about work incentives and productivity dynamics in the economy.
Source: Adobe Stock Author: Redaction Lisbon continues to attract Brazilian investors Real estate investment by Brazilian citizens continues on a growth path in Lisbon. The Portuguese capital remains one of the most sought-after destinations for those looking to diversify assets outside Brazil, benefiting from factors such as safety, political stability and a high quality of life. For many investors, buying property in Portugal represents more than a financial decision. The opportunity to live in a stable environment, with access to quality services and good infrastructure, has contributed to growing interest in the Portuguese residential market. Linguistic and cultural familiarity also plays an important role, making it easier for families seeking a lifestyle change without major integration barriers. Premium neighbourhoods lead preferences Among the areas most sought after by Brazilian buyers are central Lisbon neighbourhoods such as Príncipe Real, Chiado, Avenidas Novas, Estrela and Santo António. Proximity to international schools, premium services, commercial areas and cultural venues makes these locations particularly attractive. Cascais is also among the most valued destinations, thanks to its combination of quality of life, proximity to the sea and quick access to the capital. These locations continue to attract international investment and record consistent demand for mid-range and high-end properties. The appreciation of these markets also reflects the growing interest of foreign buyers, who tend to invest in residential segments with strong long-term appreciation potential. Safety and stability drive demand The perception of safety remains one of the main factors leading Brazilians to invest in Portugal. Social stability and low crime rates are often highlighted as advantages compared with other locations. The countrys economic and political stability also contributes to investor confidence. As a member of the European Union, Portugal offers a predictable regulatory framework and easy access to international markets, characteristics valued by those looking to preserve and grow their assets. In addition, many buyers view real estate investment as a long-term strategy for their families, associating property acquisition with the possibility of international mobility and access to future opportunities. Real estate market remains attractive Strong demand for property from Brazilian buyers continues to reinforce the importance of this segment in the national real estate market. Lisbon remains the main centre of attraction, although other nearby locations are also benefiting from this growing interest. At the same time, the flow of people between Portugal and Brazil remains active, with the arrival of new residents and the return of Portuguese emigrants to the country. This dynamic helps sustain housing demand and reinforces Portugal’s position as one of the most attractive destinations for residential investment in Europe. With safety, quality of life and stability as key factors, all indications suggest that Brazilian investors’ interest in the Portuguese real estate market will continue to grow in the coming years.
Source: Adobe Stock Author: Redaction Deposit interest rates continue to rise Term deposit interest rates in Portugal rose again for the third consecutive month in April, reaching an average rate of 1.44%. Despite this increase, national deposit interest rates remain below the Euro Area average. The rise in deposit interest rates reflects a slight improvement in household savings returns, although the pace of increase remains limited. In March, the average rate stood at 1.42%, showing gradual growth. Households placed more money in deposits, with new operations reaching 13,398 million euros, the highest level ever recorded. Most savings continue to be channelled into short-term deposits, where deposit interest rates are slightly higher. Portugal below the Euro Area average Despite the rise in deposit interest rates, Portugal continues to show lower returns than the Euro Area average. In April, the European average stood at 1.91%, significantly above Portuguese deposit interest rates. This gap keeps the country among those offering the lowest deposit interest rates in the region, although it moved up one position in the European ranking, now ranking sixth among the lowest-paying countries. The evolution of deposit interest rates highlights the gap between the Portuguese banking market and the European context, with a direct impact on household savings returns. Corporate deposits follow a similar trend In corporate deposits, deposit interest rates also rose in April, reaching 1.83%. However, the volume of new operations fell compared to the previous month, standing at 11,326 million euros. As with households, the vast majority of corporate deposits are concentrated in maturities of up to one year, accounting for almost all new placements. This preference directly influences the evolution of deposit interest rates in the corporate segment. Savings remain concentrated in the short term The data shows that deposit interest rates are mainly concentrated in short-term products, both for households and companies. Among individuals, around 97% of deposits are placed in maturities of up to one year. In companies, this figure rises to 99.7%, highlighting a strong preference for immediate liquidity. This structure helps explain the evolution of deposit interest rates, which continue to depend heavily on short-term market conditions. Despite the rise in deposit interest rates, the overall environment remains one of relatively low returns, especially when compared with the Euro Area average, where rates remain significantly higher.
Source: Adobe Stock Author: Redaction Application processing is delayed Thousands of people affected by bad weather in Portugal remain without a response, and support for storm damage is unlikely to reach all beneficiaries by the end of the month. In total, there are more than 14,000 applications for storm damage support awaiting assessment in the municipalities of Marinha Grande and Leiria. In Marinha Grande, the storm damage support process involves 3,365 applications, while in Leiria the figure rises to 10,808. These numbers highlight the scale of requests for storm damage support following the damage caused by storms at the beginning of the year. As of 6 June, only around 10% of applications in Marinha Grande had been processed, representing 334 completed cases under the storm damage support scheme. The delay is affecting the speed at which storm damage support is being granted to affected families. Municipalities unable to meet deadlines The municipalities of Marinha Grande and Leiria will not be able to complete the assessment of storm damage support applications by 30 June, despite the target set by the Centre Regional Coordination and Development Commission (CCDR). The regional coordination body set targets to speed up storm damage support, in cooperation with the Intermunicipal Community of the Leiria Region. However, the volume of applications for storm damage support is making the response more difficult. This delay in storm damage support leaves thousands of families waiting for a decision on funds intended for the reconstruction of homes damaged by extreme weather events. Payments already exceed 24 million Despite delays in processing storm damage support, the Centre CCDR has already paid around 24 million euros in compensation for housing damage. According to the latest data, 6,237 applications have already been completed and paid under the storm damage support scheme, totalling 23.72 million euros. These payments show that storm damage support is progressing, although unevenly between application processing and actual compensation payments.
Source: Adobe Stock Author: Redaction European investment in youth employment in the EU The European Union has been stepping up investment in youth employment in the EU, with around 25 billion euros allocated through cohesion policy. The aim is to make it easier for young people to enter the labour market and improve their professional integration. Despite the significant level of funding, doubts remain about the real impact of these measures in the medium and long term on youth employment in the EU, particularly regarding the stability of job placements after financial support ends. Lack of data on long-term results The European Court of Auditors warns that there are not enough indicators to assess whether youth employment in the EU remains consistent after 12 or 18 months. Currently, most data only covers periods up to six months after support ends. This limitation makes it difficult to analyse the true impact of youth employment policies, as it does not show whether young people’s integration into the labour market is sustainable or only temporary. Without this information, it becomes harder to measure the effectiveness of EU programmes. Support measures and risks in fund allocation Youth employment policies in the EU include hiring incentives, training programmes and support for labour market integration. However, the European Court of Auditors considers that in some cases the objectives are not clearly defined. This lack of definition may lead to EU funds for youth employment not being used in the most efficient way, including situations where support may have been granted for jobs that would have been created anyway without public incentives. In addition, some programmes are not sufficiently linked to on-the-job training, a factor considered essential to improve employability in the context of youth employment in the EU in the long term. Social challenges and future perspectives Another relevant challenge for youth employment in the EU concerns young people who are outside the labour market and face social, educational or health barriers. These groups are more difficult to reach through current policies. Although youth unemployment has decreased over the last decade, young people still remain more likely to be unemployed compared to the rest of the active population, keeping youth employment at the centre of European concerns. In the future, strengthening clear objectives and improving data collection will be essential to ensure that investment in youth employment generates lasting and verifiable results.
Source: Adobe Stock Author: Redaction National Nature Restoration Plan Portugal will invest, on average, around 500 million euros per year until 2030 in nature restoration, through the National Nature Restoration Plan (PNRN). The programme includes more than 400 nature restoration measures, covering terrestrial, marine, river, agricultural and urban ecosystems. The PNRN places Portugal among European countries at an advanced stage of implementing nature restoration policies, with a broad set of actions for environmental recovery and biodiversity protection. Ecosystems and nature restoration measures The nature restoration plan foresees interventions in different ecosystems, with emphasis on wetlands, river systems, coastal habitats and urban areas. Around 260 square kilometres requiring nature restoration have been identified in national territory. Among the nature restoration measures, the planting of three million trees per year until 2030 stands out, as well as the creation of a nursery network to support nature restoration. The plan also includes river restoration and barrier removal, promoting ecological continuity. In marine ecosystems, nature restoration will be accompanied by more research and mapping, due to lack of data over around 33 thousand square kilometres. Nature restoration in cities and forests Urban nature restoration aims to maintain and increase green spaces until 2030, with special attention to climate adaptation in cities. Pilot projects are planned in several Portuguese cities, including green corridors, tree planting and shade areas. In forest ecosystems, the nature restoration plan sets the recovery of around 44 thousand hectares by 2030, with specific programmes for montados, national forests and pollinators, essential for ecological balance. Nature restoration plan objectives The PNRN is based on principles such as restoring ecological functions, territorially differentiated management and coordination between public policies and funding. In total, the nature restoration plan includes 407 measures across several environmental sectors. The Government highlights that the nature restoration plan will be essential to halt biodiversity loss and strengthen climate change adaptation, also aligning with the European nature restoration strategy in the next EU multiannual financial framework.
Source: Adobe Stock Author: Redaction Rise in natural gas in the regulated market The price of natural gas in the regulated market will increase by 6.4% between 1 October 2026 and 30 September 2027, according to ERSE. This is one of the largest rises in recent years, only surpassed by previous energy crisis periods. This increase in natural gas in the regulated market reflects the evolution of international costs and pressure on supply, in a context marked by geopolitical instability and greater uncertainty in energy markets. Impact on households and consumption The rise in natural gas will have a direct impact on household bills. For consumption up to 10,000 m³/year, the regulator estimates monthly increases between €0.91 and €1.62, depending on household type. As a result, the average bill in the regulated natural gas market will be €17.38 for a couple without children and €32.53 for a couple with two children. The increase in natural gas is particularly relevant for higher-consuming households. In the case of the social tariff, a 31.2% discount remains, which reduces the impact of the increase in natural gas in the regulated market, with significantly lower average monthly values. Market context and ERSE measures ERSE explains that the evolution of natural gas prices is linked to uncertainty in international supply, with particular emphasis on the impact of the Middle East conflict. This makes price forecasting more difficult and affects the balance of the regulated natural gas market. Another relevant factor is the long-term supply contract under a take-or-pay regime, which continues to influence the cost of natural gas in Portugal. Currently, there are around 437,000 consumers in the regulated natural gas market, while more than 1.1 million are in the liberalised market. Even so, all consumers are affected by regulated components of the bill. The regulator recommends comparing offers, especially during the annual review period, to mitigate the impact of the increase in natural gas in the regulated market and optimise energy costs.
Source: Adobe Stock Author: Redaction Impact of storms on public accounts The so-called storm chain had a significant impact on public finances, with estimated losses of around one billion euros in tax and social security revenue in 2026, equivalent to 0.3% of GDP. In 2027, the effect is expected to worsen with a further 300 million euros loss, according to the Council of Ministers Resolution approving the PTRR – Portugal Transformation, Recovery and Resilience. The Government highlights that this impact results from the contraction of economic activity, with direct effects on VAT and corporate tax revenue. The impact on public accounts is classified as significant due to the scale of damage caused by extreme weather events. Corporate tax, Social Security and direct losses In the case of corporate tax, the impact will be felt mainly in 2026 due to the exemption from advance payments. In 2027, the reduction in company profits will result in lower tax settlements and further impacts on advance payments. In total, a loss of around 600 million euros in corporate tax is estimated for 2026 and 300 million euros for 2027. At Social Security level, around 15,000 companies requested exemption from social contributions, representing a loss of 335 million euros. Adding support measures such as furlough schemes and employment retention incentives, the impact on Social Security exceeds 400 million euros in 2026, worsening the effect of storms on public revenue. Economic damage and structural impact Beyond the fiscal impact, the total cost of the storm chain is much higher, reaching around 5.3 billion euros in damage, according to the assessment linked to the European Union Solidarity Fund. Of this, more than 3 billion euros relate to the public sector. Road infrastructure was among the most affected, with losses exceeding one billion euros, including roads, bridges and hydraulic crossings. The electricity grid and telecommunications also recorded damages above 160 million euros. PTRR and recovery measures Under the PTRR, several funding sources are planned for recovery, including the State Budget, European funds, municipal budgets and the European Union Solidarity Fund. Affected companies will have access to support lines from Banco de Fomento, including investment and working capital funding, as well as support for reindustrialisation. In agriculture, a package to restore productive capacity was activated through the CAP Strategic Plan (PEPAC). In housing, support covers up to 100% of eligible expenditure, with limits per property and including temporary rehousing costs. The PTRR also sets out prevention and response measures, with investments in resilience, protection and operational capacity across the territory.
Source: Adobe Stock Author: Redaction Land clearance deadline extended The deadline for land clearance aimed at preventing rural wildfires has been extended until 30 June across the entire national territory. The decision follows adverse weather conditions and responds to requests from several organisations linked to the forestry sector. Despite the extension, the National Association of Portuguese Municipalities considers that tackling wildfire risk requires structural measures that go beyond extending deadlines. The association advocates a broader strategy to ensure effective land management and reduce the vulnerability of forest areas. Land clearance remains one of the main wildfire prevention measures, particularly near homes and areas most exposed to risk. Land registry and forestry teams are priorities Among the main concerns of municipalities is the difficulty in identifying landowners. Currently, a significant proportion of rural properties still lack an updated land registry, making it more difficult to enforce legislation and carry out preventive interventions. In this context, municipalities are calling for greater human, technical and financial resources for land registration work across the country. Priority should be given to areas located near population centres and zones with a higher wildfire risk. Another proposal involves strengthening forestry firefighter teams and Forestry Technical Offices. Municipalities consider it essential to increase available resources to meet growing responsibilities in the management and prevention of rural wildfires. Lack of companies hampers interventions Municipalities also warn of difficulties in hiring companies specialised in land clearance. Increased demand has led to a shortage of supply and rising costs, making it harder to carry out work within the established deadlines. Even when landowners fail to meet their obligations, the legal procedures required to allow municipal intervention can take several weeks. Notifications, consultation periods and administrative decisions make the process lengthy and reduce the speed of action. To overcome these limitations, municipalities support the creation of a pool of specialised companies to facilitate contracting and speed up wildfire prevention operations. With the approach of the highest-risk months, municipalities continue to identify priority areas, focusing efforts on protecting populations and reducing the risk of rural wildfires throughout the national territory.
Source: Adobe Stock Author: Redaction What the Single Social Benefit is The Single Social Benefit represents one of the biggest changes in Portugal’s social support system. The new Single Social Benefit will bring together 13 support schemes from the solidarity subsystem, including the Social Integration Income, simplifying access to social benefits. The aim of the Single Social Benefit is to reduce bureaucracy and concentrate several social supports into a single benefit. Instead of multiple applications, rules and processes, the Single Social Benefit will unify criteria and procedures, making the system simpler for beneficiaries of the Single Social Benefit. The reform of the Single Social Benefit also includes an incentive-to-work component, to prevent increases in income from automatically leading to the loss of social benefits. A link to solidarity activities is also planned, although the details of the Single Social Benefit still depend on the final version of the legislation. Which benefits are included in the Single Social Benefit The Single Social Benefit will integrate 13 benefits from the solidarity subsystem, including the Social Integration Income. These social benefits aim to combat poverty and social exclusion, and are now being grouped into the new Single Social Benefit. Among the main social benefits that may be included in the Single Social Benefit are RSI, social pensions and unemployment social benefit. These Single Social Benefit supports currently follow different rules, which will be harmonised. RSI, one of the pillars of the Single Social Benefit, guarantees a minimum income for families in situations of poverty. Social pensions and unemployment social benefit are also essential supports that will be integrated into the Single Social Benefit to simplify the system. Who is excluded and when it comes into force Not all social benefits will be included in the Single Social Benefit. The Solidarity Supplement for the Elderly is excluded from the Single Social Benefit, as are family protection subsystem benefits such as child allowance. The Single Social Benefit is currently in the legislative phase and is part of the Recovery and Resilience Plan. The aim is for the Single Social Benefit to come into force by August 2026, a deadline required to avoid jeopardising associated EU funds. During the transition to the Single Social Benefit, rules will be created to protect current beneficiaries of social support. The move to the Single Social Benefit is expected to be gradual, avoiding abrupt income losses. How the transition to the Single Social Benefit works The transition to the Single Social Benefit will be phased, ensuring that current beneficiaries do not lose social protection. The Single Social Benefit also aims to introduce a more flexible income adjustment model. With the Single Social Benefit, salary increases will not automatically imply the total loss of social benefits, as happens in the current system. Instead, the Single Social Benefit provides for a gradual reduction of benefits. The value of the Single Social Benefit will be linked to the Social Support Index, which is used as a reference for several benefits in Portugal. The evolution of this index will be key to the future update of the Single Social Benefit and its amounts.
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