The transformation of rustic land into urban land: what's going to change

Significant changes have recently been made to the legal regime governing the reclassification of rustic land into urban land in Portugal. These changes aim to alleviate the shortage of land for construction and promote accessibility to housing. They also aim to reduce bureaucracy, increase the supply of land, and create conditions for affordable housing while maintaining ecological and social balance.

Simplification of processes and decentralization
One of the most striking changes was delegating power to reclassify rural land exclusively to the local councils. This decision eliminates the need for opinions from entities such as the Regional Coordination and Development Commissions (CCDR) or the Portuguese Environment Agency (APA), making the process more agile and straightforward.

Town councils can now directly propose the transformation of rural land into urban land, with final approval from the Municipal Assembly. However, this simplification is accompanied by a greater degree of responsibility and transparency, ensuring that the process benefits local communities.

Requirements and Restrictions
Not all rustic land is eligible for reclassification. Construction is still prohibited in areas of high agricultural suitability, coastal zones, and flood-prone regions. The focus is on land with minimal ecological impact that integrates harmoniously into the existing urban fabric.

In addition, developers who obtain permission to build have five years to complete the urbanization works, extendable by one year if the infrastructure has already been started. This measure aims to prevent real estate speculation and ensure that land is actually used for construction.

Price-controlled housing
Another important point is the introduction of price ceilings for new homes built on reclassified land. These limits are based on the national median price per square meter, with adjustments for municipalities with higher costs, such as Lisbon and Cascais.

. For most municipalities, the maximum price allowed will be 125% of the national median or the value of the median, choosing the highest.
. For high-cost municipalities, the maximum ceiling will be 225% of the national median, currently set at 3,737 euros per square meter.

In addition, 70% of new construction must be within these price limits, while the remaining 30% can be earmarked for complementary uses such as commerce or housing without price restrictions.

Impact on the real estate market
These changes represent a significant step towards increasing the availability of land and, consequently, the number of homes. Although they are not miracle solutions, these measures are expected to help reduce housing prices, increase the number of dwellings available on the market, and attract investment in a sustainable way.

At the same time, the requirement for cost-controlled construction and the focus on transparency and public accountability offer a balanced model that can serve as an example for future housing policies.

The reclassification of rustic to urban land under these new rules represents an innovative attempt to address the challenges of the housing market in Portugal. The measures adopted have the potential to promote a more diverse and affordable housing supply while preserving ecological and social interests. However, the effective implementation of these changes will require strong collaboration between local governments, developers, and communities.