On 30 December, Decree-Law No. 117/2024 was published, introducing the seventh amendment to the Legal Framework for Territorial Management Instruments (RJIGT), approved by Decree-Law No. 80/2015, of 14 May. These amendments primarily aim to address the shortage of housing and rising housing costs by increasing the availability of land designated for residential construction, in alignment with the objectives set forth by the “Construir Portugal” programme.

In this context, and pending a more detailed analysis of this legal instrument, the following relevant points are highlighted:

• EXCEPTIONAL RECLASSIFICATION FOR URBAN LAND

As an exceptional measure, it is allowed to create construction areas on land compatible with pre-existing urban areas, provided it is justified by the need to protect values of environmental, heritage, economic, and social public interest. However, construction remains prohibited on high-agricultural-value land—land classified as Class A1 or soils classified as Class A and Class B must remain part of the National Agricultural Reserve. Similarly, the fundamental values and natural functions of the National Ecological Reserve remain safeguarded, as well as the risks to people and property.

The demonstration of the economic and financial sustainability of land transformation is no longer required, and reclassification is now legitimised by a resolution of the municipal assembly upon proposal by the relevant Municipality. The resolution must set out the costs of urban operations, the respective execution timeline, and the conditions for the redistribution of benefits and burdens, considering all urbanisation costs involved.

• EXPANSION OF THE SCOPE OF THE SPECIAL RECLASSIFICATION REGIME UNDER ARTICLE 72-B OF RJIGT

The special reclassification regime for land to urban use now applies not only to cases where the intended purpose is residential but also to purposes connected to residential use and complementary uses, provided the following cumulative requirements are met:

• The urbanisation to be developed ensures consolidation and coherence with the existing urban area;
• At least 700/1000 of the total above-ground construction area is allocated to public housing or “moderately priced housing”;

• A development unit (“unidade de execução”) is defined and implemented;

• Adequate general and local infrastructure, collective use equipment, and green spaces are ensured to meet the needs arising from new uses; and
• Compatibility with the local housing strategy, municipal housing charter, or housing reserve is demonstrated.

• INTRODUCTION OF THE CONCEPT OF “MODERATELY PRICED HOUSING”

The decree introduces the concept of “moderately priced housing” defined as housing where the price per square metre of gross private area does not exceed the national median sale price per square metre of housing or, if higher, 125% of the median price in the relevant municipality where the property is located, up to a maximum of 225% of the national median. These values are determined based on the most recent statistics from the National Statistics Institute (INE), as of the date of the sale and purchase contract, considering all transactions for determining sale prices.

This concept differs from existing ones, such as “controlled-cost housing,” as it seeks to address access by the middle class, balancing local and national median market values while setting maximum thresholds to promote greater equity.

The allocation of properties to moderately priced housing and the price limitations for individual units of a building incorporated under the horizontal property legal regime or for sole urban buildings are facts subject to mandatory registration with the land registry. Consequently, legal acts or transactions regarding the transfer, encumbrance, or promise of transfer or encumbrance of these properties cannot be executed without reference to these facts and their definitive inscription with the land register, or in violation of the stipulated maximum limits, under penalty of voidability.

Furthermore, RJIGT grants to the municipalities a pre-emption right following the first transfer/sale of buildings or individual units built on a land reclassified under the Special Reclassification Regime set forth in Article 72-B.

• SIMPLIFIED REGIME FOR AMENDING TERRITORIAL PLANS

The simplified procedure provided for in Article 123 of RJIGT now also encompasses:

• Land requalification arising from the cessation of economic activities or the discontinuation of infrastructure or equipment that determines the qualification of the covered area, provided at least 700/1000 of the above-ground construction area is allocated to public housing or moderately priced housing, without prejudice to the necessary shared-use infrastructure and equipment and the need to guarantee the habitat;
• Changes to the number or typology of dwellings, as well as to urban design or building characteristics, without impacting other urban planning parameters;

• Changes to the maximum height of buildings or volume of industrial facilities;

• Adoption of parameters for areas allocated to public housing, controlled-cost housing, or affordable rental, as well as public and private parking parameters for urbanisation operations where at least 700/1000 of the above-ground construction area is allocated to these purposes, as provided for by law; and
• Provision for increasing the applicable construction index by up to 20% in specific areas defined through simplified amendments, provided at least 700/1000 of the additional above-ground construction area resulting from the increase is allocated to public housing or moderately priced housing.

• SUSPENSION OF RULES REGARDING DEVELOPABLE OR PROGRAMMED URBANISATION AREAS

Municipal or inter-municipal plans that fail to incorporate the classification and qualification rules stipulated by the RJIGT across the municipality’s territory by 31 December 2024 will be subject to the suspension of rules regarding developable or programmed urbanisation areas as classified in the existing territorial plans. While suspended, no acts or operations involving the occupation, use, or transformation of the land in these areas may be undertaken, under penalty of nullity.

Exceptions apply to developable or programmed urbanisation areas that have since acquired the characteristics of urban land or where urbanisation works specified in a detailed plan (“plano de pormenor”), urbanisation contract, or prior administrative act are completed within the prescribed timeline. These exceptions, however, require a declaration from the relevant municipality identifying and delimiting the areas to which they apply, to be transmitted to the competent regional coordination and development commission.

In accordance with the spirit underlying this amendment to RJIGT, the suspension of these rules does not preclude urban operations intended for residential purposes or purposes connected to housing and complementary uses, which remain subject to the specific reclassification procedure for such effect.

• ENTRY INTO FORCE

Decree-Law No. 117/2024, of 30 December, enters into force 30 days after its publication—on 29 January 2025. However, the rules concerning the suspension of developable or programmed urbanisation areas entered into force on 31 December 2024.

For further information, please contact:

Gonçalo Rhodes | Local Partner
goncalo.rhodes@pt.Andersen.com

Bernardo Silveira | Director
bernardo.silveira@pt.Andersen.com