Published by Global Banking & Finance Review®
Posted on January 7, 2026
2 min readLast updated: January 20, 2026
Add as preferred source on GooglePortugal's tax exemption scheme helps young buyers amid a housing crisis, with over 70,000 beneficiaries and increased mortgage guarantees.
By Sergio Goncalves
LISBON, Jan 7 (Reuters) - Portugal's tax exemption scheme to help young people buy their first homes is proving effective amid the country's housing crisis, with more than 70,000 applicants benefiting in just over a year, the finance minister said on Wednesday.
Joaquim Miranda Sarmento also told a parliamentary committee that more than half of the initial 1.2 billion euro ($1.40 billion) package of public guarantees for banks providing mortgages to young buyers had already been used, and the government had subsequently increased it by 350 million euros.
Some 23,000 buyers have used such guarantees.
"I believe these measures are now considered successful, having enabled many young people to buy homes," he said.
The scheme, effective from late 2024, exempts most young buyers aged up to 35 from property transfer tax (IMT) on first homes valued at just over 300,000 euros, with a partial exemption on homes costing a little more than 600,000 euros.
In Portugal, IMT rates are progressive, ranging from 2% to 8% of the value of the property.
Portugal's housing crisis, which particularly affects young people, stems from a chronic shortage of affordable homes, exacerbated in recent years by an influx of wealthy foreigners buying property.
The problem is worst in major cities such as Lisbon, where house prices have tripled and rents more than doubled in the past decade.
"We have an imbalance between supply and demand, that's what has been driving prices up and we need to increase the supply of new homes, but that takes time," the minister said.
($1 = 0.8559 euros)
(Reporting by Sergio Goncalves; editing by Andrei Khalip)
A mortgage is a loan specifically used to purchase real estate, where the property itself serves as collateral for the loan.
Property transfer tax is a tax imposed on the transfer of ownership of real estate, typically calculated as a percentage of the property's value.
A housing crisis occurs when there is a significant shortage of affordable housing, leading to increased prices and limited availability for potential buyers.
A tax exemption is a monetary exemption that reduces taxable income, allowing individuals or entities to pay less tax.
Explore more articles in the Finance category
