Recently enacted Law no. 56/2023, of 6 October, introduced a set of measures related to housing. This package is usually referred to as “More Housing Package” (Pacote Mais Habitação) and was first announced by the Government in February 2023.

Some of the landmark measures in this package have been topics of discussion in recent months, including (but not limited to) the measures listed below:

1. Amendments introduced to the Touristic Short-Term Rental (“TSTR”) rules (Alojamento Local), approved by Decree-Law no. 128/2014, of 29 August:

-TSTR registration pertaining to an autonomous unit that is part of a building incorporated under the horizontal property regime (“HP”) for residential purposes requires a decision of the condominium allowing the unit to be used for a different purpose (a decision which may require the approval of all unit owners if it translates into an amendment to the title of incorporation of the HP);

-On the other hand, in buildings incorporated under HP, the condominium owners' meeting may object to a unit being used for TSTR by resolution adopted by at least 2/3 of the building's overall percentage, without cause or need for justification, unless the incorporation title or previous resolution of the condominium owners' meeting expressly authorizes the use of the unit for TSTR;

-All TSTR registrations are personal and non-assignable (assignability is no longer restricted to certain types of establishment);

The registration of a TSTR establishment will now be valid for 5 years and renewable for an additional 5-year period by express decision of the city council;

-New registrations for TSTR establishments in the form of flats and lodgings operating in independent units are suspended throughout mainland Portugal, with the exception of some inland territories. City councils will, however, be Allowed to decide whether they wish to maintain such suspension;

-Holders of TSTR registrations are required to evidence that they continue to operate the TSTR activity within 2 months following the entry into force of Law 56/2023, failing to provide such evidence shall cause the registration to be cancelled;

-Holders of TSTR registrations in the form of flats and lodging establishments integrated into autonomous units will be required to pay an extraordinary fee.

2. Amendments to the Urbanization and Building Regime (Regime Jurídico da Urbanização e Edificação), approved by Decree-Law no. 555/99, of 16 December (RJUE):

-Municipalities shall monitor the living/habitability and conditions of buildings, and may order owners to correct "irregular situations" of lease or sublease;

-Residential autonomous units and parts of urban buildings suitable for independent use that have been classified as vacant for more than 2 years, located outside inland territories, may be subject to forced lease by the municipality or the Housing and Urban Rehabilitation Institute, I.P. (Instituto da Habitação e Reabilitação Urbana, I.P.), after certain conditions foreseen in Law 56/2023 have been met.

3. Amendments to the Entry, Stay, Exit and Removal of Foreigners from National Territory regime (Entrada, Permanência, Saída e Afastamento de Estrangeiros do Território Nacional), approved by Law no. 23/2007, of 4 July:

-New applications for residence permits for investment activity (referred to as “golden visa”) submitted under the following activities will not be accepted:

• Capital transfers of 1.5 million euros or more;

• Acquisition of real estate worth 500 thousand euros or more;

• Acquisition of real estate, the construction of which has been completed for at least 30 years or which is located in an urban rehabilitation area, and carrying out rehabilitation works on the acquired real estate, amounting to 350 thousand euros or more.

-Authorization to renew golden visa granted up to the date of entry into force of Law 56/2023 determines the conversion of the permit granted into a residence permit for entrepreneurial immigrants, and its holders must comply with the minimum period of stay of 7 days in the first year and 14 days in subsequent periods of 2 years;

-Applications for residence permits for investment activity and permit renewals that are pending decision, as well as applications that are pending prior control procedures (procedimentos de controlo prévio) before city councils on the date of entry into force of Law 56/2023 will remain valid.

4. Limits imposed upon New Lease Agreements:

-Initial rent of new residential leases of properties which were subject to lease agreements within 5 years prior to the date in which Law 56/2023 enters into force are capped at the amount of the last rent due for the same property in said previous lease agreements plus a coefficient of 1.02 (2%);

-When the immediately preceding lease agreement has not been updated in accordance with the previous annual coefficients, said coefficients may still be applied to the initial rent of new residential lease agreements, provided that no more than 3 years have elapsed since the date on which the relevant coefficient could have been applied;

-Initial rent of new lease agreements relating to properties that have undergone remodeling or restoration work, certified by the municipality, may be increased by the amount of the corresponding costs borne by the landlord, up to a limit of 15%;

-Legal coefficient for 2023 set at 1.0543.

5.Lease agreements prior to 1990 are not transferred to the New Urban Lease Regime (Novo Regime do Arrendamento Urbano).

6. The Tenant and Landlord’s Desk (Balcão do Arrendatário e do Senhorio), formerly known as National Lease Desk (Balcão Nacional do Arrendamento) will handle injunction procedures pertaining to lease matters.

7. Under the special eviction procedure, the State undertakes the payment of rents that become due after the end of the opposition period, with a maximum monthly amount of 1.5 times the guaranteed minimum monthly wage, with a total limit of 9 times, provided that a set of circumstances are met.

Law 56/2023 came into force on 7 October 2023.

Nevertheless, the effects of some of the amendments introduced by Law 56/2023 were postponed, such as the payment of rents by the State in the special eviction procedure, which will only take effect on 1 January 2024.