Real estate sector says land law will not solve problem in short term

Real estate brokerage companies, developers and investors today assured that they are not against the land law, but argued that it will not solve the problem, calling for tax simplification and debureaucratization.

“If this land law allows more homes for those who need them and if it does not cause any damage in urban and environmental terms, it will be very positive,” said the president of the Association of Real Estate Professionals and Companies of Portugal (APEMIP), Paulo Caiado, in statements to Lusa.

However, he said that in the short and medium term this law will not have any effect, pointing out that between the legislative change and the construction of a house on land that has changed from rural to urban, at least six years will pass.

“For those who need a house in the short or medium term, the effect will be zero,” he insisted.

At stake is, for example, the approval of licensing, the inspection of water, electricity and sewage services, as well as the period required to have a building project and the respective construction.

Paulo Caiado argued that affordable housing must be 40% or 50% below current values, which he considered to be “theoretically possible”, if the State decides to create a new housing segment.

To do this, you must contribute three factors – land, tax structure and time – which represent 50% of the price of a house.

In return, according to the association, the State should require that, in the event of a sale, the amount set by the owner be the same as the amount for which the house was purchased, plus inflation.

“If you want to sell for more, you will have to return the State’s financial contribution. I don’t see any other way for us to have affordable housing,” he said.

In turn, the president of the Portuguese Association of Real Estate Developers and Investors (APPII) today lamented the attack being made on the sector, guaranteeing that he is not against the land law.

“What has been happening in recent days is a serious and unfounded attack on real estate activity […], whose investment volume represents 15% of the value of the national GDP [Gross Domestic Product]”, said Hugo Santos Ferreira today at Lisbon's Urban Rehabilitation Week, according to the speech sent to Lusa.

APPI highlighted that this sector is the one that generates the most wealth for the country, attracts investment and aims to contribute to the construction of more homes for the Portuguese.

Hugo Santos Ferreira said he was not worried about the land law, which he classified as positive, despite not being able to solve the problem.

The association proposes simplifying urban licensing and reducing the VAT (Value Added Tax) rate on construction from 23% to 6%.

Real estate developers and investors also stressed that they are not the problem, but part of the solution, criticizing the executive for not providing the conditions for this to happen.

“We are ready to build the cities and homes that Portugal and the Portuguese need. We do not need more sand in the machine, nor noise in our message and our work. We need space and conditions to be part of the solution,” he concluded.

Parliament today approved, in its specialty, changes to the current legislation that allows rural land to be reclassified as urban land for housing construction, with most of the modifications resulting from an agreement between the PSD and PS.

Among the main changes approved is the replacement of the concept of “moderate value” housing – used by the Government – ​​with “affordable rental” or “at controlled costs”.

The reinstatement of the territorial criterion of “contiguity with urban land”, for the consolidation of existing urban areas, was also approved, as was the revocation of the possibility of building housing for agricultural workers outside existing urban areas.