New Portuguese association proposes debt-free housing model shifting risk to private sector
The Housing and Development for Portugal association unveiled a plan that uses municipal surface-rights leases and reduced VAT to build affordable homes without adding to public debt.
The newly formed Associação Habitação e Desenvolvimento Por Portugal (AHDPP) introduced a financing model aimed at delivering hundreds of thousands of homes for Portugal’s middle class without increasing state borrowing. The approach pairs affordable rent caps—no more than 35% of household income—with lowered construction VAT of 6% and long-term surface-rights leases, often up to 60 years, granted by local councils. A public tender would select private builders, who assume all construction-related risks, while municipalities collect rents and eventually regain ownership of the properties.
The proposal, endorsed by State Secretary for Housing Patrícia Gonçalves Costa, cites examples from other EU nations and claims to be scalable nationwide without legislative changes. The association’s board includes figures such as António Carmona Rodrigues and Miguel Saraiva, and it plans to seek a meeting with Housing Minister Miguel Pinto Luz.
