It is not accurate to claim that Portugal faces a housing shortage. Portugal has one of the highest ratios of houses per resident – boasting 5,970,677 houses for 10,467,366 residents in 2021 — and ranks high in vacant properties. Homeownership in Portugal stands at 78%, above the European average of 69%. Theoretically, there are 1.4 houses available for each of Portugal’s 4.1 million households.
However, of these nearly 6 million properties, 18.5% are secondary residences (vacation homes), and 12.1% are vacant or require renovation. These figures are essential when addressing this topic: 30.6% of Portuguese homes, roughly 1.8 million, could potentially enter the market. Several factors contribute to these houses remaining off the market:
* Properties caught in inheritance processes may remain unoccupied, especially with complex inheritance laws and potential conflicts.
* Elderly individuals residing in care facilities may retain ownership, hoping to return to their homes.
* Financial constraints may prevent owners from undertaking necessary renovations.
* Many owners simply prefer not to rent out their properties.
### Understanding The Housing Market
There’s also limited incentive to offer properties on the standard Portuguese rental market. Landlords must declare rental income monthly, paying taxes ranging from 10% (for leases over 20 years) to 28% (for leases under 3 years). Additionally, rent increases have been government-regulated since 2006, discouraging rentals and contributing to property neglect.
Official data showed a decrease of 9.3% in rehabilitation licenses granted in 2022 compared to the previous year, and a 17.4% decrease compared to pre-pandemic (2019) levels — due, among other factors, government rent freezes and high income taxes.
Furthermore, changing family structures in Portugal also play a role. There has been growing numbers of single-person households (up by 161,000 between 2011 and 2021) and two-person households (up by 105,000 over the same period), increasing the housing needed per capita.
This means that if the growing numbers of empty houses continues and the government doesn’t come up with effective solutions to increase the number of affordable homes in Portugal, the problem will persist.
