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Compensation for landlords announced

As reported by Lusa, the Council of Ministers has sanctioned compensation for landlords with lease agreements predating 1990, exempting them from the regulations of the New Urban Lease Regime (NRAU).


The Council of Ministers endorsed a decree-law outlining compensation for landlords with housing rental contracts predating November 18, 1990. The compensation, capped at 1/15 of the property's Patrimonial Tax Value, applies to these contracts and exempts them from the New Urban Lease Regime (NRAU).


Reports from owner and tenant associations on Tuesday highlighted that the National Housing Council approved compensation for landlords with pre-1990 rental agreements.

In a November 22 release, the Institute of Housing and Urban Rehabilitation (IHRU) published a study regarding rental contracts not subject to the NRAU, coinciding with the report on Housing Leases in Portugal. The study aimed to identify families with "old" incomes (before 1990) and estimate the required support for these contracts.


The document detailed calculations based on different legislative measures, including the More Housing package and a 2015 decree-law recommending subsidies for low-income tenants, elderly individuals, or those with disabilities after the transitional regime concludes.


As per the study's findings, the expected financial support from the More Housing package, active since October this year, prevents the transition to the NRAU for old housing rents. The estimated support varies based on the chosen solution.


The study identified 124,083 housing rental contracts predating 1990 (excluding 27,537 units owned by public entities or non-profits). Compensation might reach around €54.5 million monthly or €653 million annually, assuming it accounts for the difference between current rents and those based on the average value per square meter of new lease contracts.


Alternatively, applying a ceiling of 80 percent to the median square value of new lease contracts could lower the expense to €39.8 million per month (€477.8 million annually).

Another scenario considered aligns with the provisions of the More Housing legislation, projecting a monthly cost of €2.2 million (€26.6 million annually). Here, the calculation incorporates tenants paying rent based on income levels and compensation covering the difference up to 1/15th of the property's tax asset value, if higher.


The study, part of the State Budget for 2022, was conducted by the Housing Leasing and Urban Rehabilitation Observatory (OHARU) in collaboration with PlanPP, INE, and the Tax and Customs Authority (AT).

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