The Land Law and Its Impact on the Future of Housing in Portugal

The President of the Republic promulgated the new Land Law, a decisive measure for territorial planning and the housing market in Portugal. The central objective of the legislation is to facilitate the construction of affordable housing by allowing the reclassification of rural land into urban land, provided that up to 70% of the area is designated for public or affordable housing.

Key Changes in the Land Law

• Reclassification of Land: Rural land can now be converted into urban areas, accelerating the urbanization process and making it more accessible for housing construction.

• Controlled Pricing: The price of homes built on these reclassified lands will be capped at 125% of the median price practiced in the municipality.

• Municipal Competence: Responsibility for land reclassification now lies with Municipal Assemblies, which allows for a more local and streamlined process.

Impacts and Challenges

Although the Land Law has great potential to increase the supply of housing, especially for lower-income groups, the impact in high-demand areas such as Lisbon and Porto may be limited. There are also concerns about real estate speculation and the risk of price increases in less sought-after areas, which must be closely monitored.

MBM Company's Role

With its vast experience in the real estate sector, MBM Company continues to adapt its strategies to explore the opportunities created by this new legislation.

Land reclassification represents an excellent opportunity for investors, but it is crucial to monitor the processes closely to ensure the feasibility and profitability of projects.

This new legislation is a significant step in transforming the housing market in Portugal. For investors seeking to better understand how this change will impact their projects, MBM Company is ready to offer specialized consultancy services.

Useful Links:

• Land Law – Decree-Law No. 117/2024 (access to the official version of the legislation)

• Details on the impact of the Land Law (additional information on the promulgation and changes in the law)