Portugal slashes housing investment by 63.5% as crisis deepens

Portugal’s latest budget reduces housing-related spending by €1.844 billion, a 63.5% cut that coincides with the termination of the extraordinary Recovery and Resilience Plan funding. The most drastic cut hits the access-to-housing programme, whose allocation drops from €2.216 billion to €424 million, while funds for rehabilitating existing stock fall to €10 million and the emergency housing reserve receives no money. Conversely, spending on new public affordable housing rises to €612 million, sourced from Portugal 2030, private investors and tax incentives that will cost the state €303 million in forgone revenue.

Finance Minister Joaquim Miranda Sarmento confirmed the financing is secured and reiterated the goal of delivering 59,000 public housing units by the end of the decade, though no specific 2027 targets were announced. Municipalities will see a 29.4% reduction in housing investment, amounting to €1.45 billion, but the government may exempt certain housing-related loans from debt caps to expand local borrowing capacity.