By amending the Legal Framework for Land Management Instruments, the Portuguese government has made it easier for local governments to reclassify rural land as urban land.
As long as it is meant for house development, rural land may be easily reclassified as urban land under Decree-Law 117/2024, which was adopted on the 30th of December. Despite his doubts over its consistency with territorial planning and ordering, President Marcelo Rebelo de Sousa signed this legislation into law in order to encourage the production of housing alternatives at controlled costs.
Political parties and environmental non-governmental organisations (NGOs) launched an opposition movement in response to the RJIGT amendment. BE, PCP, Livre, and PAN requested that the amendment be taken up by parliament in order to repeal it. These organisations contend that by permitting construction on property in the National Ecological Reserve (REN) and the National Agricultural Reserve (RAN), the proposed policy may lead to increased real estate speculation and environmental degradation. Concerns regarding the measure's potential to destroy agricultural and forest lands vital to the nation's food security and ecological balance have been raised by a number of NGOs, including Quercus and Zero.
In response, the government claims that the RJIGT amendments are intended to make it easier to build homes on land that already exhibits urban features or has poor agricultural compatibility, which will lower housing costs. The goal of the proposal, according to Manuel Castro Almeida, Minister of Territorial Cohesion, is to prevent urban sprawl and guarantee the consolidation of current metropolitan districts. There will be limitations on the categorisation of rustic land, particularly in regions that are more ecologically and environmentally vulnerable, such the RAN and REN protection zones.
In order to ensure better social justice, the diploma also mandates that public or affordable housing occupy at least 70% of the entire construction space on reclassified land.
In 95% of communities, homes can be sold for more than their market worth.
Nonetheless, the RJIGT modifications uphold the notion of "moderate-value housing," which has drawn criticism from many experts who worry that this model may worsen market pricing, particularly in urban areas.
According to the notion of "moderate value," housing prices can surpass the municipal median by 25%, provided that they do not beyond 225% of the national median. In actuality, this implies that homes can be sold for prices that are comparable to or more than the national median in areas like Braga and Guimarães, where prices are lower than the national average. However, because there is a shortage of rural property in the capital, it will be challenging to implement the legal ceiling of €3,737 per square metre in Lisbon, which is lower than the going rates.
Portugal's typical home sale price in 2024 was €1,661 per square metre, according to data from the National Statistics Institute (INE). In spite of this, homes may be sold for more than this amount in the 295 towns it serves, which runs counter to the government's advocacy of housing accessibility. The legal maximum price ceiling in urban areas like Porto, Cascais, or Loulé is likewise lower than the going rate, but the measure's effect is limited by the scarcity of rural land.
The government anticipates a 20% decrease in home prices due to the new law.
However, the government promised today that the new land law will lower the cost of new homes in district capitals and metropolitan areas by 20%, bringing the prices down below those registered in Portugal in 2024.
According to the Ministry of Territorial Cohesion's information sent to Lusa, the "new law sets maximum prices for new homes that are below the average values of real estate transactions registered in Portugal in 2024." "The current average price per square metre in new homes is 50% higher than that of used housing," the Ministry also notes, citing data from the National Statistics Institute (INE).
According to Minister Castro Almeida, who is cited in the paper, "it not only prevents but also stops speculation to be able to buy new homes where the maximum price limit is 20% below current market prices."
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