For far too long, that conversation has been dominated by political extremes, especially proposals based on tight regulation, rent controls, and administrative pricing. That is not the path forward. It’s time to be honest: the Portuguese housing crisis will not be solved with more rules, but with real execution, clear priorities, and market-friendly pragmatism.

The government’s latest housing program brings some promising ideas for more housing supply, lower VAT for construction, and long-term rental contracts with stable terms. These goals are welcome, and the real estate market generally supports the direction. But support for good ideas is not the same as blind optimism. We’ve seen many promises over the years. The real challenge is not writing plans. It’s turning them into action.

Portugal’s main housing issue is not a lack of regulation. It’s the lack of execution, predictability, and simplicity. Building houses takes too long. Getting licenses approved can feel like an endless obstacle course. Taxes and fees consume a massive portion of the final price, imagine nearly 40% in some cases. Investors are hesitant, not because they don’t see an opportunity, but because the system works against them at every stage.

That’s where the focus needs to be as I said before so much times: on reducing bureaucracy, simplifying processes, and building faster. The promise to apply the reduced VAT rate of 6% to construction and rehabilitation is a good start, but it must be implemented now, not in another five years. If we want lower prices for homebuyers and more affordable rents, we need to cut the cost of building. This includes not only VAT but also excessive taxes like the AIMI (Additional to the Municipal Property Tax), which penalizes ownership and adds pressure to already high housing prices.

The proposed construction of 59,000 public housing units is also a good idea, but we must be sure that it happens. Too often, public housing projects are delayed, poorly managed, or forgotten when priorities change. We need a consistent, professional, and accountable plan for building homes on a scale. Involving private developers through public-private partnerships can speed this up, as long as these partnerships are respected, fair, and not suffocated by red tape.

It’s also important to look at the rental market with realism. Stable, long-term rental contracts can help both landlords and tenants, but this only works if contracts are respected, taxes are fair, and there is a legal framework that protects property rights without punishing property owners. Rent control or artificial price limits might sound good on paper, but in practice, they reduce investment, lower the quality of properties, and shrink the supply of available rentals. That’s the opposite of what we need.

Portugal must also think beyond Lisbon and Porto. Smaller cities and rural areas deserve real housing strategies, with incentives to build, modernize, and attract residents. Digital tools, decentralization of services, and better transport connections can unlock these markets. We can’t solve a national housing problem by focusing on only two cities.

In short, we need a shift in mindset. Less ideology, more action. Less control, more construction. Less talk, more delivery. The real estate sector is ready to be part of the solution, but it needs a government that listens, supports, and acts with consistency and pragmatism.

Let’s not lose this moment. With the right decisions, Portugal can become a country where housing is not just a dream, but a reality for families across all income levels. We have the knowledge, the investment interest, and the professional capacity. Now we need the courage and the intention to build more and sustainability to achieve our goals for our next generations.

Author

Paulo Lopes is a multi-talent Portuguese citizen who made his Master of Economics in Switzerland and studied law at Lusófona in Lisbon - CEO of Casaiberia in Lisbon and Algarve.

Paulo Lopes