Porto students’ federation proposes temporary limit on home purchases by non-residents

The Porto Academic Federation (FAP) has called for a temporary ban on non-residents buying properties intended for housing. The student organisation sent a package of proposals to parties represented in parliament on 20 October and urged “dialogue and moderation” in addressing the housing crisis. It argues that measures based only on price caps could reduce the supply of homes available to rent. The package is a political proposal and does not itself change current rules on buying or renting property.

FAP wants income from long-term residential rental contracts to be exempt from IRS personal income tax up to the current “minimum existence” threshold of €12,880 a year. It presents the measure as a tax incentive for owners to offer more homes for permanent rental. The announcement does not establish that the threshold is already available automatically to all landlords; implementation would require a change to the relevant tax rules.

For people buying a primary residence, FAP proposes allowing mortgage interest to be deducted from IRS, with a ceiling of €900 and a larger benefit for lower income brackets. The federation says this would make the tax treatment of buyers and renters more equitable. The figure is not a €900 cash grant or a monthly mortgage subsidy; it is the proposed cap for a tax deduction if the measure is adopted.

To increase supply, FAP also wants nationally approved modular building designs to be accepted throughout Portugal without a fresh technical review in every municipality. The aim is to allow factory production to proceed in parallel with the licensing process. The federation is also asking for clarification that the 6% VAT rate applies to modules and components manufactured in factories. FAP president Francisco Porto Fernandes said the latest census data point to more than 250,000 vacant homes that are suitable for habitation, arguing that policy should focus on bringing more homes onto the market. Government or parliamentary action would still be needed for any part of the package to take effect.