The Portuguese Government recently approved significant changes to the Land Law, allowing the reclassification of rural land to urban with the aim of increasing the supply of affordable housing. This measure seeks to address the growing demand for housing at prices compatible with middle-class incomes and to combat the shortage of supply in urban centers.
Main Changes:
Reclassification of Rural Land: Municipalities are now authorized to reclassify rural land as urban, provided that at least 70% of the built area is designated for public housing, affordable rental, or controlled-cost housing.
Simplified Process: The reclassification can be initiated by municipalities through a simplified amendment of the municipal master plan, facilitating and speeding up the process.
Eligibility Criteria: The reclassification must be compatible with the local housing strategy and consider contiguity with the existing urban land.
Impact on the Real Estate Market:
This new legislation opens opportunities for real estate developers and investors interested in developing affordable housing projects. By allowing construction on land previously classified as rural, it broadens the range of options for housing development, especially in peripheral areas of urban centers.
However, it is essential that projects respect sustainability guidelines and urban integration, avoiding uncontrolled expansion and ensuring the quality of life for future residents.
