Parliament maintains Land Law but plans amendments
Although the law has now entered into force, upcoming negotiations in a parliamentary committee will introduce modifications.
Last Friday, the Parliament rejected a proposal to repeal the controversial Land Law that allows reclassification of rural land as urban but agreed to amend it in committee discussions.
The motion to revoke the law, presented by left-wing parties BE, PCP, Livre, and greens PAN was blocked by votes from the centre-right Government coalition (AD), the far-right Chega, and the liberals (IL), while the Socialist Party (PS) abstained.
The legislation, officially known as the Regime Jurídico dos Instrumentos de Gestão Territorial, was enacted despite concerns from environmentalists and urban planners.
Although the law entered into force on Wednesday, January 29, upcoming negotiations in a parliamentary committee will introduce modifications.
This interim period has sparked speculation that developers might rush to take advantage of the current regulations before new restrictions are imposed.
Legal Uncertainty Sparks Debate
Legal experts are divided on the potential impact of this transition period. Some anticipate a surge in real estate projects, while others argue that regulatory uncertainty could deter investment.
“There’s a window of opportunity for urban development under the current rules, which could lead to a wave of new projects,” Luís Couto, founding partner of SPCB Legal told ECO. However, Paulo de Jesus Correia, managing partner of Santiago Mediano, cautioned that while developers might try to capitalize on the law, municipal authorities’ reluctance could slow approvals.
The law’s core controversy stems from concerns over transparency and urban planning oversight.
One key amendment proposed by PS aims to introduce an additional layer of scrutiny by requiring approval from regional authorities (CCDR) before reclassifying land.
This measure is meant to curb potential abuses and ensure that development aligns with broader urban planning goals.
Housing Affordability at the Center of the Debate
Another significant modification under discussion is the shift from the concept of “moderate pricing” to “controlled pricing” in housing developments.
Experts argue that this change will better regulate housing costs by tying them to construction expenses and household income rather than fluctuating market prices.
“The controlled pricing model is more effective in curbing housing costs, as it considers actual construction expenses and ensures affordability,” Ana Borges, a senior associate in real estate law, explained to ECO.
Future Amendments and Political Negotiations
Negotiations between PS and the government will also determine whether to introduce a three-year time limit on the law’s provisions, with the possibility of extensions based on its impact.
Additionally, PS is pushing to reintroduce the concept of “contiguity” in land reclassification, ensuring urban expansion follows a structured pattern rather than scattered developments.
In contrast, the Government argues that defining what constitutes contiguity in urban land is difficult. “The house next door? Across the street? 100 meters away?” questioned Minister in the Cabinet of the Prime Minister and of Territorial Cohesion, Manuel Castro Almeida in Parliament last week.
The decision was made to remove the term and instead use “a more urban planning-oriented concept: ensuring the coherent consolidation of urban clusters.” In other words, “avoiding fragmentation.”
However, PS wants the term reinstated and insists that land reclassification should only be allowed for housing or “complementary uses,” rather than for infrastructure projects “related to residential purposes.” Minister Castro Almeida explained that this category would include facilities such as pharmacies, laundromats, or grocery stores.