Right to Durable Housing
The durable housing right was one of the last measures of the previous government mandate. This housing alternative arrived to minimize the precarious shortage of rental properties.
What is the DHD – right to durable housing? This is the right of one or more persons to reside in a property for life, provided that they comply with contractual rules. These rules are based on the payment of a security deposit, and a monthly payment to the property owner, among other parameters that we explain:
- Any natural or legal person, public or private that is property owners can form a DHD, provided that the property is free of debts. For candidates to tenants, any natural person can apply.
- The contract must be concluded by public deed or private document in the land register. The tenant must state his intention within 30 days of the conclusion of the contract. Another subject that should be settled in giving the house, the property should have a medium conservation level.
- Payment is subject to an initial deposit of 10% to 20% of the average value per m² posted by INE – Statistics Portugal. Therefore, size and location will influence the price of the deposit.
- The tenant can renounce to the contract in its first 10 years and will receive the full amount of the deposit value. In case of waiver in the 11th to 30th year, the tenant is already subject to withdrawal 5% of the value annually.
The owner’s advantages
- The landlord, when entering into a DHD contract, guarantees a stable monthly return and is always assured that his property will be in good condition due to the payment of the security by the tenant.
- Some house charges are left to the tenant, causing the landlord to no longer be responsible for the works, IMI payment and city taxes.
- With the surety value paid by the tenant, the owner has the possibility to monetize it.
The tenant’s advantages
- Earns the right to live in a property for life for how long he wants to or until he fails to comply with the provisions of the DHD contract. This measure applies perfectly to those who somehow cannot get a house loan.
- Initial lower investment on the house purchase, because they are exempt from the IMT, stamp duty, house deed cost, insurance premiums, house registration, and other subjects relative to the new house purchase.
The tenant won’t have to endure the costs related to the common areas and the condominium fees if it is a building.
- You can hypothecate your DHD if you would need a bank loan to pay the security deposit.
This decree-law has come into force on the last 5th of September and suggests one more measure for Portuguese families to get adequate housing.