New Measures in the Field of Youth Housing

The Government met today (23/05/2024) in the Council of Ministers, which took, among others, the following decisions:

In the field of Housing

Put in place a set of measures to support the purchase of the 1st home for young people up to 35 years old through the exemption of IMT, Stamp Duty and fees on the purchase of the 1st home. 

• IMT 

Acquisitions of urban property or autonomous fraction of urban property intended exclusively for own and permanent housing are exempt from IMT (Municipal Property Transfer Tax), whenever it is the first acquisition of property for this purpose. for taxpayers up to 35 years of age, up to €316,272. 

For properties above €316,272 and up to €633,453, the maximum exemption of the previous bracket is maintained, and there is no exemption for properties of higher value. 

As the IMT is a tax whose revenue is municipal, the Government will create a compensation mechanism for municipalities that see their revenues reduced by the application of this exemption. 

Enters into force on August 1

• Stamp Duty 

In the same cases provided for in the IMT exemption situation, an exemption from stamp duty on the acquisition of real estate by young people also applies up to the maximum amount of stamp duty that would be due for real estate up to €316,272. 

For properties of higher value, the remaining tax amount is due. 

Enters into force on August 1

• IMT + Stamp Duty Savings 

Currently, the acquisition of a house implies a redoubled financial availability, since, in addition to the payment of the down payment – not covered by housing loans – it is also necessary to pay the corresponding taxes that are levied on the entire transaction. 

The Government proposes to exempt young people up to 35 years of age from one of these two expenses, facilitating access to the first home, with savings values that vary according to the value of the property, representing savings of 5,578 euros (properties of 200 thousand euros), 9,478 (250 thousand euros), 14 686 (€350,000 and €450,000). 

The annual budgetary impact is €100 million.

• Fees 

In addition, there will also be an exemption from the fees due for the registration of the acquisition, by transfer for consideration between living persons, of property with a taxable patrimonial value of up to €316,772 (which includes exemption from fees due for the registration of loans and mortgages).

The measure will be re-evaluated after 3 years.

• Public Guarantee on the purchase of the 1st home 

The State personal guarantee may be granted to credit institutions when the following conditions are cumulatively met for the first transaction of own and permanent housing: 

• The borrower(s) of the contract are between 18 and 35 years of age and are tax resident in Portugal;  
• The borrower(s) of the contract enjoys income that does not exceed the 8th bracket of the IRS;  
• The borrower(s) of the contract is not the owner(s) of an urban building or an autonomous fraction of an urban residential building;  
• The borrower(s) of the contract have never benefited from the State's personal guarantee under this law;  
• the value of the transaction does not exceed EUR 450 000;  
• The State's personal guarantee does not exceed 15% of the transaction value of the urban building or autonomous fraction of an urban building; and 
• The State's personal guarantee is intended to enable the credit institution to finance the entire transaction price of the urban property or autonomous fraction of an urban building. 

This amount is in addition to the tax reduction.

It is incumbent upon the members of the Government responsible for the areas of finance, housing and youth to approve, within a maximum period of 60 days from the entry into force of the decree-law approving this measure, the regulations necessary for the provisions of this diploma. 

Banco de Portugal and the Portuguese Association of Banks were heard. 

It enters into force on 1 August.