Portuguese State to Pay up to Half of the Rehabilitation of “Unacceptable” Homes

4 June 2018

Families who are living in “unacceptable” conditions, and who make up to 1,715 euros per month, may request support for rehabilitating, building or purchasing a home.

The Portuguese state will finance up to half the cost of rehabilitating homes deemed “unacceptable” for families in precarious conditions, and who apply for the First Right – Housing Access Program. Under the program, support will also be granted for the rental, construction and purchase of a home, and state financing may account for up to 40% of the value of the property acquired. Families who earn up to €1,715 per month can apply for aid.

The rules were set out in a decree published on Monday in the Diário da República which defines the functioning of the program approved by the Portuguese government last month under the legislative package New Generation of Housing Policies. The First Right program, one of several approved in the legislative package, is designed to “ensure access to adequate housing for people living in unacceptable conditions and who lack the financial capacity to access, without support, a housing solution.”

Thus, support will be granted for the rental of adequate housing, the construction or acquisition of a new home or the rehabilitation of the dwelling where the family already resides.

The support granted by the Institute for Housing and Urban Rehabilitation (IHRU) or by financial institutions wishing to join the program may be allocated to direct beneficiaries or beneficiary entities, including the State (through the General Directorate of the Treasury and Finance, Autonomous Regions and Municipalities); public companies; charitable groups, private institutions of social solidarity; residents’ associations and housing and construction cooperatives; or the owners of flats or buildings located in degraded areas.

To be eligible for the program, beneficiaries, who may be nationals or foreign nationals (provided they have valid residence permits), must live in conditions deemed “unacceptable” and be “in financial need.” Applicants and their families must be experiencing a “financial shortage” and have a net worth of less than 5,000 euros, and an average monthly income is less than four times the social support index (IAS). The IAS is currently set at 428.90 euros, which means that to be considered deprived, families can earn up to 1,715 euros per month.

At the same time, the conditions deemed “unacceptable” include, for example, cases of insecurity, which covers, first and foremost, homelessness. People who are forced to leave their homes due to bankruptcy or evictions, in the case of households where only one resident has gainful employment or where the resident(s) have disabilities or are over 65 years of age, would also be deemed as living in a situation of insecurity.

“Unacceptable conditions” include situations of “insalubrity and insecurity”, overcrowding (when the size of the housing is considered insufficient for the size of the household) or “inadequacy” to the needs of people living in the home (as in the case of people with disabilities).

If they fulfil these requirements, candidates under the First Right may request support for the rental, rehabilitation or construction/purchase of a home or, also, the acquisition of land for the construction of buildings or projects with controlled costs.

In the case of rehabilitation, beneficiaries may receive a maximum reimbursement of 50% of construction expenses, provided that this amount does not exceed 40% of the base value of buildings, as defined in the Municipal Property Tax Code.

In the case of construction, the support can reach up to 35% of the final value of the work, while for purchases, the reimbursement can reach a maximum of 40% of the value of the home (provided that this amount does not exceed 30% of the property’s base value).

Anyone who wants to benefit from these supports, whether the head of a household or legal entities, should apply to the municipalities. These, in turn, may decide to allocate municipal housing, include the application within the scope of the municipality’s application to promote a housing solution or consider the application as an individual application.

The IHRU will analyse and approve applications, taking into account the “validity and feasibility of housing solutions.”

Original Story: Economia Online – Rafaela Burd Relvas

Translation: Richard Turner