Portugal’s housing landscape is set for significant change. On February 28, 2025, Parliament approved amendments that could reshape how rural land is used for housing. The focus? Creating more affordable rental and controlled-cost housing options. Decree-law 117/2024, already in effect since January 29, streamlines the process of reclassifying rural land for building purposes. This shift, lasting four years and retroactive to December 31, 2024, now awaits the President’s final approval.
This legislative move wasn’t without its detractors. Several parties voiced their opposition during the parliamentary review, highlighting concerns about potential impacts. Debates focused on protecting sensitive ecological areas and ensuring sustainable development.
What does this mean for Portugal’s land use? The approved amendments redefine “moderate-value housing” as “affordable rental” or “controlled-cost housing”. A key requirement is that at least 70% of any new construction must be dedicated to these affordable options. Furthermore, projects must align with local housing strategies and ensure adequate infrastructure is in place. Maintaining the continuity of urban development is also a priority.
Importantly, the new law puts limits on where land can be reclassified. Areas within the National Ecological Reserve (REN), encompassing vital ecosystems like coastal zones, wetlands, and flood-prone areas, are off-limits. The law also protects prime agricultural land within the National Agricultural Reserve (RAN). Development in areas near REN and RAN sites will need to prioritize environmental safeguarding.
Despite these safeguards, proposals for more stringent environmental impact assessments in certain RAN areas were rejected. The new regulations emphasize the need to demonstrate the economic viability of projects and ensure funding sources are secured.
While housing for agricultural workers outside urban areas is no longer permitted, developers focusing on affordable housing can benefit from a 20% increase in construction allowances. The process also includes consultation with regional development bodies to ensure comprehensive planning.
