New Land Law in Portugal: What Changes and What Are the Implications?

New Land Law in Portugal: What Changes and What Are the Implications?

The recent approval of the new Land Law in Portugal, on February 28, 2025, introduced several changes that directly impact the real estate market and urban planning. The main goal is to increase the availability of affordable housing, but there are also challenges, particularly regarding bureaucracy and the implementation of the new rules. Let's understand what changes with this new legislation.

Main Changes

1. Controlled-Cost Housing (CCH) and Affordable Rental Housing

The traditional "Affordable Housing" has been replaced by “Controlled-Cost Housing” (CCH). Now, the reclassification of rural land to urban land will only be possible if the goal is to build CCH or affordable rental housing.

2. Land Reclassification: More Control and Bureaucracy

In addition to municipal approval, land reclassification to urban now also requires the opinion of the Regional Coordination and Development Commissions (CCDR), which increases bureaucracy and may delay processes.

3. Economic Feasibility of Projects

Promoters will need to provide proof of the economic feasibility of their projects, including ensuring financing, before the approval of urban projects. This aims to increase transparency in the sector and reduce real estate speculation.

Impact on the Real Estate Market

With these changes, an increase in bureaucracy and less flexibility in land reclassification is expected. Although there is an incentive for the construction of affordable housing, financial difficulties could hinder the implementation of new projects. Developers and investors must be prepared for the challenges that arise with these requirements.

The new Land Law represents an important step toward making housing more affordable in Portugal, but it is necessary to monitor its practical implementation to understand whether it will truly achieve the desired goals or create more obstacles for the market.