The Portuguese government has introduced a significant amendment to land use regulations, aiming to increase the availability of land for housing and address the growing need for decent and affordable housing. This new law creates a special regime for reclassifying rural land as urban land, provided the majority of the area is dedicated to social or affordable housing. Here’s what you need to know about this important change.
Key Objectives of the New Law The primary goal of this amendment is to:
Increase the supply of land for housing development.
Ensure the majority of new construction is allocated to social housing, affordable rental housing, or low-cost housing.
Address Portugal’s ongoing housing crisis by making land use regulations more flexible.
How the New Regime Works Under the new law, landowners can request the reclassification of rural land as urban land, but with strict conditions:
Affordable Housing Requirement:
At least 70% of the total building area must be reserved for social or affordable housing.
Affordable housing is defined as housing where the price per square meter does not exceed:
The national median sales price.
125% of the municipal median price (with a maximum of 225% of the national median).
Reclassification Process:
Landowners must submit a request to the City Council, which oversees the reclassification process.
The municipality will initiate a simplified amendment to the Municipal Master Plan (PDM) to reclassify the land.
A reasoned proposal is prepared and submitted for public consultation for a minimum of 20 days.
After public consultation, the City Council may make adjustments before submitting the proposal to the Municipal Assembly for final approval.
Landowner Participation:
Property owners can participate in the public consultation and provide relevant information to support the reclassification proposal.
Part of the "Construir Portugal" Programme
This new regime is part of the broader "Construir Portugal" initiative, which aims to:
Make land use regulations more flexible.
Allow construction and urbanisation in areas previously classified as rural or part of ecological and agricultural reserves.
Simplify and expedite the process of land reclassification for housing development.
Will This Solve Portugal’s Housing Crisis? While the new law represents a proactive step toward addressing the housing shortage, its effectiveness remains to be seen. By incentivizing the development of affordable housing, the government hopes to alleviate pressure on the housing market. However, the success of this initiative will depend on its implementation and the willingness of landowners and developers to participate.
Conclusion The new land law marks a significant shift in Portugal’s approach to housing development, prioritizing affordability and accessibility. By reclassifying rural land for urban use and ensuring the majority of new construction is dedicated to affordable housing, the government aims to tackle the housing crisis head-on.
For landowners and developers, this presents an opportunity to contribute to a critical national priority while benefiting from a streamlined reclassification process.
Need Expert Guidance? If you’re a landowner or investor interested in exploring opportunities under the new land law, contact our team for expert advice and support. We’re here to help you navigate the process and make the most of this transformative initiative.