Background information

The Government approved a set of exceptional measures to support family income, with a view to mitigating the effects of inflation and the consequent increase in prices: the "Families First" package of measures.

The extraordinary support to renting was included in this package and it was established by Article 3 of Law 19/2022 of 21 October.

The measure was discussed under the scope of the Medium-Term Agreement for Improving Income, Wages and Competitiveness .

Content of measure

The extraordinary support to renting is done through the attribution of a tax benefit on property income.

The direct application of the law results in an increase of 5.43% (CPI without housing in the 12 months ending in August). In order to compensate landlords for the differential vis-à-vis the 2% increase set, by limiting the increase of rents to 2023 (article 2, no. 2 of Law 19/2022 of 21 October), part of the respective property income will be excluded from taxation (Personal Income Tax, IRS or Corporate Income Tax, IRC).

The value of the excluded income will be calculated in order to neutralize the impact of the Limitation of the increase of the rents for 2023 for landlords, depending on the tax rate to which their property income would be subject. These rates differ depending on the duration of the contracts.

Use of measure

This information is not available.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Does not apply to businesses	Other groups of citizens

Actors and funding

Actors	Funding
National government Social partners jointly	Other

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Agreed (outcome) incl. social partner initiative	Agreed (outcome) incl. social partner initiative
Form	Consultation through tripartite or bipartite social dialogue bodies	Consultation through tripartite or bipartite social dialogue bodies

Social partners' role in the implementation, monitoring and assessment phase:

• Social partners jointly
• Main level of involvement: Peak or cross-sectoral level

Involvement

The measure was discussed under the scope of the Medium-Term Agreement for improving Income, Wages and Competitiveness.

Social partners´ involvement took place in the context of the tripartite Permanent Commission of Social Concertation (CPCS), which includes: government representatives; representatives of employer confederations, i.e., the Entrepreneurial Confederation of Portugal (CIP), the Confederation of Commerce and Services of Portugal (CCP), the Confederation of Farmers of Portugal (CAP), and the Confederation of Portuguese Tourism (CTP); and the representatives of trade union confederations, i.e., the General Confederation of Portuguese Workers (CGTP) and the General Union of Workers (UGT). Their involvement was requested by institutional setting by the initiative of the government. CGTP, the largest trade union confederation did not sign the tripartite agreement, but participated in its discussion at the CPCS rounds.

The agreement shall be compulsorily subject to regular evaluation and appropriate readjustment by its signatories at the CPCS:

1. During its validity, annually, at the time of the parliamentary presentation of the State Budget Proposal (taking into account not only the framework and solutions contained therein, but also the framework and guidelines of the Stability Programme);
2. Whenever there is a substantial change in the underlying economic and social conditions.

Views and reactions

While all the employer confederations (CAP, CCP, CIP and CTP) and the trade union confederation UGT signed the tripartite agreement, CGTP did not sign it, questioning some of the measures foreseen.

Namely, CGTP considers that the Families First package of measures presented by the government do not guarantee the necessary response to the growing difficulties of workers and their families. The "price increase response plan" does not solve the day-to-day difficulties that workers and pensioners are facing.

UGT also expressed some criticism. Families First is an essential and welcome package of measures, even if it can only be considered late and clearly insufficient, something that is all the more evident when we analyse the sets of measures that were gradually taken by other countries, which were earlier and more intense in their intervention.

Sources

• 06 September 2022: CGTP's reaction to Families First Package (www.cgtp.pt)
• 07 September 2022: UGT's reaction to Families First Package (www.ugt.pt)
• 08 September 2022: Families First - Portuguese Government Q&A (www.portugal.gov.pt)
• 09 October 2022: Acordo de Médio Prazo de Melhoria dos Rendimentos dos Salários e da Competitividade (ces.pt)
• 10 October 2022: Posição da CGTP - Acordo de Médio Prazo de Melhoria dos Rendimentos, dos Salários e da Competitividade (www.cgtp.pt)
• 21 October 2022: Law 19/2022 of 21 October https://dre.pt/dre/detalhe/lei/19-2022-202455960 (dre.pt)