The Essentials You Need to Know:

The State Budget for 2026 (OE2026) was finally approved on November 27th. This document, which decides where the Government will spend money, brings important measures aimed at increasing the supply of affordable homes in the country.

Attention: Many of the most advantageous measures for your wallet (like tax cuts) are not yet included in the OE but will be proposed soon by the Government in a separate fiscal package.

✅ Approved Measures (What the Government CAN do now):

The Government's main focus is to use public assets to create more controlled-price housing:

1. Sale of State Properties and Land:

   • What happens: The Government has the green light to sell 16 properties and establish partnerships on 14 plots of land owned by the State.

   • The Goal: To create up to 10,000 homes for affordable rent by the end of 2035, by selling these public assets to those who will convert them into housing.

   • Important Note: A proposal by the PS party to try and prevent this sale was rejected.

2. Municipal Support for Loans:

   • What happens: Local Councils (municipalities) can now grant real guarantees (as if they were guarantors) on properties in rental support programs, facilitating access to loans for the construction of cheaper homes (using PRR funds).

3. Residency Control for Foreign Citizens:

   • What happens: A measure was approved to limit the number of residence certificates for foreign citizens per house. The goal is to combat documentary fraud and protect urban heritage.

❌ Measures That Were Left Behind (What WAS REJECTED):

There were important proposals that many expected but which were not approved in the Budget:

• Deductibility of Mortgage Interest (for everyone): The measure that would allow ALL homeowners to deduct part of the mortgage interest paid on their housing loans from their IRS (income tax) was not approved. Currently, only those who bought a house before 2012 have this benefit.

• End of Early Repayment Fees: The extension of the exemption from the commission paid to banks when prepaying a variable-rate mortgage was also rejected.

🔜 What Will Still Change (The Big Fiscal Package):

The Government intends to address the housing crisis with a Fiscal Package (tax measures) that will be presented and voted on separately. The goal is to lower taxes for those who build and rent at fair prices, and to help those who buy.

Key Fiscal Proposals for Housing:

• VAT Reduction for Construction: VAT reduced to 6% for the construction of homes for sale or rent at moderate prices.

• Support for Young Buyers: Reinforcement of the Public Guarantee for loans and maintenance of the IMT Exemption (Municipal Property Transfer Tax) on the purchase of a first home, with updated value limits (e.g., total exemption up to €330,539).

• Renting (Landlords): Reduction of the IRS rate applied to landlords from 25% to 10% for rental contracts at moderate prices.

• Renting (Tenants): Increase in the IRS deduction for moderate housing rents to €900 annually.

• Capital Gains Reinvestment: End of IRS taxation on capital gains from the sale of homes if the value is reinvested in properties for moderate-price rental.

• Additional Fiscal Incentives: Temporary exemption from IMT and IMI (Municipal Property Tax) for properties intended for moderate-price rental.

Bureaucracy and Licensing:

The Government also wants to eliminate bureaucratic barriers to accelerate the market. On the table is the simplification of licensing processes for house construction and the review of Municipal Master Plans (PDM).