No Rent-Law Deal at São Bento: Montenegro Keeps the 2,300 Euro Moderate Rent, While the Socialists Report Openness to Tax-Free Sales of Second Homes Up to 300,000 Euros
Carneiro left São Bento accusing Montenegro of intransigence: no fresh start on the rental law and no end to the 2,300 euro moderate rent. He reported openness on a capital gains exemption for second homes and higher IMT for non-resident buyers. What happens next.
The Prime Minister's first round of housing talks ended on Thursday 5 November without a deal on the rental law. José Luís Carneiro, leader of the Partido Socialista (PS, Socialist Party), left São Bento after a meeting of an hour and 45 minutes with Luís Montenegro and accused him of "intransigence", according to Lusa, as reported by RTP. No further meeting between the two was set.
Carneiro did report common ground on tax. The most concrete item, according to ECO, is a PS proposal to exempt from income tax the gain made on selling a second home for up to 300,000 euros, when the buyer will live in it. Carneiro said the Government showed "relative openness" to it. The Government itself made no statement on the proposal on Thursday.
Montenegro called the meetings in a televised address on Tuesday, after weeks of housing protests and tent camps in Lisbon and Porto. The Finance Minister, Joaquim Miranda Sarmento, and the Infrastructure and Housing Minister, Miguel Pinto Luz, also took part.
Where the PS and the Government still disagree
The PS had set two conditions, and the Government accepted neither, Carneiro said:
- Start the rental law again. The PS wanted the Government's bill dropped and a new law written "from zero" by a joint team. The bill is a request for parliamentary authorisation to rewrite the urban rental rules by decree. It passed its first reading on 30 September, and its committee stage has not yet begun. Montenegro had already refused to shelve it in the budget debate.
- Scrap the 2,300 euro "moderate rent". Rents up to 2,300 euros a month count as "renda moderada" (moderate rent) for tax breaks, and the PS wants that ceiling gone. "Who in this country can pay a moderate rent of 2,300 euros when the median income is around 1,040 euros?" Carneiro asked, according to ECO.
Carneiro said this did not put the 2027 budget at risk. "Our contribution to political stability in the country is not in question," he said.
The tax ideas on the table
These are PS proposals. The Government has not confirmed any of them, and none is law. The capital gains and stamp duty ideas belong to what ECO describes as an exceptional three-year regime, meant to bring existing homes onto the market.
- Capital gains on second homes: no IRS (income tax) on the gain from selling a second home for up to 300,000 euros, as long as the buyer makes it their permanent home and the property is in an area under urban pressure. Sales from 300,000 to 500,000 euros would be taxed at a reduced rate. Carneiro said the Government showed "relative openness" here.
- Stamp duty: an exemption from imposto do selo (stamp duty) on the purchase and on the mortgage.
- IMT for buyers who do not live here: Carneiro said there was "relative understanding" that IMT, the property transfer tax, should rise for people who buy a home in Portugal without living in the country and without buying it to live in. No rate or threshold was given.
- State-owned homes: he said there was "good acceptance" of handing properties of the Instituto da Habitação e da Reabilitação Urbana (IHRU, Housing and Urban Renewal Institute) to councils, with financial support from the State.
Carneiro said the tax measures would be taken up during the budget's detailed committee stage. The final vote on the 2027 budget is set for 24 November.
What the AD and Chega said
The parliamentary leaders of the governing AD coalition turned the accusation back on the PS. "It is easier to say no than to work on a solution," said Hugo Soares, who leads the PSD group, according to ECO. A party that makes withdrawing everything done so far a condition for talks shows "an absolute denial of reality", he said. Soares and Paulo Núncio of the CDS-PP offered "total openness" to discuss the rental rules with every party in committee, starting from the Government's bill.
André Ventura of Chega met Montenegro for about 40 minutes. He said he brought 50 proposals and wants measures written into next year's budget, ECO reported. He said the PS could not walk away from solutions after years in government, and suggested that President António José Seguro should step in. Ventura said technical meetings would follow, but no further meeting with the Prime Minister is planned.
Seguro, speaking in Madrid, said he had "no expectation that everything is resolved today" and expected more meetings.
What happens next
- Friday 6 November: four ministers (Pinto Luz, Miranda Sarmento, the Presidency Minister António Leitão Amaro and the Parliamentary Affairs Minister Carlos Abreu Amorim) meet the other parties in Parliament. JPP is to be received on Tuesday.
- For tenants and landlords: nothing has changed. The current rental rules apply until a new decree is approved and published.
- For sellers and buyers: the capital gains and IMT ideas are proposals only. Today's rules apply, including the limits of the existing capital gains break for reinvesting in a rental.
