Are you under 35 and looking for your dream home?
The Portuguese Government announced a set of measures that aim to make access to own housing easier for young Portuguese people.
The set of measures proposed by the State will come into force from August 1, 2024. For those more distracted, the clauses of the proposed measures can be confusing.
1. Public guarantee
When applying for a home loan, the bank will analyze a set of factors to determine whether it is profitable to lend you the required amount. The maximum limit that the bank can provide is 90% of the total amount. This means that the remaining 10% is up to you. It is precisely with this value that the State can help you. With the new measure, the Government will be able to contribute up to 10% of the loan value, thus covering the amount not financed by the bank. Furthermore, the Portuguese state acts as its guarantor.
How can you benefit from this measure?
To be able to benefit from the public guarantee you must meet the following criteria:
Age between 18 and 35 years old and tax resident in Portugal;
Income that does not exceed the 8th tax bracket (€81,199/year or approximately €5,800/month);
The contract holder cannot be the owner of an urban building or an autonomous fraction of an urban residential building;
Young people who have never enjoyed public guarantees from the State;
The value of the property cannot exceed 450,000 euros;
The State's public guarantee cannot exceed 15% of the transaction value of the urban building or autonomous fraction of an urban building.
2. Exemption from IMT and Stamp Tax
IMT and Stamp Tax are amounts charged when purchasing a property. Now, according to the most recent housing measures, some changes appear:
Total exemption: young people up to the age of 35 are exempt from IMT and Stamp Tax when purchasing their first home up to a value of €316,772.
Partial exemption: For properties valued between €316,772 and €633,453, only the first €316,772 will be exempt from IMT and Stamp Tax. The difference in value will be subject to a fee of 8%.
What conditions must be met?
Age: Up to 35 years old at the time of purchasing the house.
No ownership records: Not owning other properties in Portugal or abroad.
First purchase: The exemption only applies to the first purchase of your own permanent home.
Income conditions: Annual household income cannot exceed 6 national minimum wages (around 36,000 euros).
3. Porta 65 Program
The Porta 65 program offers support for young people looking to rent a property. The support consists of the allocation of a portion of the rent, over a period of 12 months. This measure comes into force from September 1, 2024.
What's included?
Abolition of the maximum income limit as a criterion for excluding candidates;
Reduction in the number of months of salary receipts required, from 6 to 3 months, as an alternative to the IRS declaration;
Change in the order of the application process: the young person can apply for support first and, after receiving the response, look for housing on the market;
Monthly application system, based on factors such as income and household composition, ensuring priority for those most in need.
It is still too early to draw conclusions about the impact of the measures, however, there are some predictions about what could change in the context of housing in Portugal.
The Portuguese Government estimates that this package of measures could benefit around 20,000 young people per year. In fact, it is expected that these changes will be able to boost the real estate market and facilitate access to the first home.
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Source: Imovirtual
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