Tax breaks for foreign residents in Portugal are “no longer justified”, said Mr Prime Minister Antonio Costaannouncing the end of this program in 2024, as it led to a rise in rents and the housing market, in one of the poorest countries in western Europe.

The program, launched in 2009, allows foreigners residing in the country for more than 183 days a year to benefit from a special tax rate of 20% on income derived from economic activity in Portugal and from “high added value activities”, such as those practiced by doctors and university professors.

The program was implemented with the aim of attracting investors and professionals, while the Portugal was experiencing an economic crisis.

Other advantages of the program are: tax exemptions on almost all foreigners’ incomes if they are taxed in the country of origin and a single tax rate of 10% on pensions granted from another country.

Portuguese citizens who had lived abroad for five years or more could also apply.

Costa stated last night on Portuguese CNN that the program “inflated the housing market”, and called it a “fiscal injustice that is no longer justified” to exist.

“This no longer makes sense,” the Portuguese prime minister said, explaining that those who are already benefiting from it will continue to benefit.

The announcement came two days after thousands of people took to the streets of Lisbon and other cities across Portugal to protest against rising rents and house prices, fueled by growing urban renewal and tourism that amounts to record levels.

According to government data, more than 50% of workers had a monthly salary of less than €1,000 last year, while rent prices in Lisbon since the start of the tourism boom in 2015 have risen by 65%, making rents unaffordable. of apartments for many.

Home sale prices soared 137% in that period, according to housing data specialists Confidencial Imobiliario.

Critics say measures announced by the government earlier this year, which include restrictions on short-term Airbnb rentals and changes to the country’s golden visa system, are not enough to address the housing crisis, which has also been exacerbated by a chronic shortage of affordable housing.