Decree Law No. 68/2019
- Issuer: Presidency of the Council of Ministers
- Diploma Type: Decree Law
- Number: 68/2019
- Pages: 2546 - 2553
Summary in plain english
This decree-law creates the Affordable Renting Programme (Programa de Arrendamento Acessível - PAA).What will change?
The Programme will provide affordable and safe rental housing supply. Rent income in the PAA will benefit of a tax exemption.Who may access this Programme?
Any individual or legal person may provide accommodation to lease under the PAA, after registering it in the PAA's electronic platform.
Any person, family or group of individuals may rent an accommodation under the PAA after registering an application in the PAA’s electronic platform. The group of individuals involved in the application is called “agregado habitacional” (household), integrating applicants and dependants.
There will be a maximum household income for eligibility to the PAA. The maximum household income will be set by regulation.
The students or trainees enrolled in vocational training courses may adopt the status of applicants, even if they do not have income of their own, provided that the payment of their part of the rent is ensured by a person who qualifies to be a candidate to the programme.What tenancy possibilities are available under this Programme?
Tenancy agreements may be aimed for:
- permanent residence (minimum term: 5 years) or
- temporary residence of university students or graduates enrolled in vocational training courses (minimum term: 9 months).
The accommodation to be leased under this programme may be classified as:
- “dwelling” (a house or an apartment) or
- "part of a dwelling" (e.g. one bedroom, with the right to use the toilet, kitchen and common areas).
Under this program, all accommodation must meet minimum standards of safety and comfort, to be checked by the tenants.What is the monthly rent price in the Affordable Renting Programme?
The rent must be at least 20% lower than the Reference Value of the Rental Price (Valor de Referência do Preço de Renda - VRPR) applicable to each accommodation.
The VRPR is the result of several factors, such as the median renting prices released by Statistics Portugal (Instituto Nacional de Estatística - INE), the area of the accommodation, typology and other features (eg. energy efficiency, parking, equipment and furniture, lifts, etc.). The VRPR formula will be set by regulation.
A household may rent any accommodation with a monthly rent between 15% and 35% of the monthly household income, if there is at least 1 person per sleeping room.How is the tenancy agreement established?
The rental contract is concluded freely between the home/apartment provider (as landlord), and all the applicants of the household (as tenants).
In general terms, everything works like in any other rental contract, but some requirements are mandatory:
- the type of accommodation must correspond to the dimension of the household (minimum one person per room);
- the monthly rent must be between 15% and 35% of the monthly household income;
- tenants must confirm the verity of the application and the accommodation’s conditions.
The provider and the applicants may meet directly or through a real estate agent. Further on, the PAA electronic platform may provide assistance to finding rental opportunities under the Program.
To access the tax exemption, rental contracts must be registered in the Tax Authority electronic platform and further uploaded in the PAA Electronic Platform, along with the mandatory rent insurance contracts.What advantages does it bring?
This decree-law allows to:
- Promote housing affordability and reduce the renting supply gap;
- Foster the rental market, promoting stability and security in rental contracts;
- Promote good conditions for investment in housing.
This decree-law enters into force on the 1st July 2019.