The Portuguese Finance Minister, Joaquim Miranda Sarmento, has acknowledged that Portuguese people are facing difficulties with housing and the cost of living, but has highlighted increases in wages and employment and “better public services” since 2024, Executive Digest reports.

During the general debate in parliament on the proposed State Budget for 2027, Sarmento said that the Government “does not ignore” the difficulties related to housing, fuel prices, the cost of living, mobility and public services.

Nevertheless, Sarmento pointed out that the Portuguese “have today, in October 2026, better salaries, more purchasing power, more jobs and better public services than in April 2024.”

The minister also highlighted that “never in this century has Portugal been so well prepared, in terms of public finances, to withstand unexpected shocks.”

The budget proposal is scheduled for a general vote on 28 October, and the final overall vote is scheduled for 24 November, after the detailed debate process.

Wage increases and tax reductions

According to the Government, the proposed 2027 State Budget aims to continue policies of strengthening incomes and reducing taxes on families and businesses.

The Government states that the National Minimum Wage (SMN) will increase to €970, while public administration workers will receive salary increases of €60.52 or at least 2.3%, under the Multiannual Wage Enhancement Agreement.

For the third consecutive year, no tax increases are planned, and the Government says the proposal includes a further reduction in income tax, with adjustments to tax brackets and the minimum subsistence level, “allowing those earning the minimum wage to remain exempt from paying tax.”

Housing and employment

Regarding housing, the proposed 2027 State Budget maintains the exemption from IMT (Property Transfer Tax) and IS (Stamp Duty) for eligible buyers aged 35 or under purchasing their first permanent home.

In addition, incentives for renting housing at moderate prices are proposed, with tenants eligible for an increased rent deduction of up to €1,000, while landlords who charge moderate rents would benefit from a reduced tax rate of 10%.

The Government also expects employment to grow by 1.7% in 2026 and 1.4% in 2027, with the unemployment rate projected to fall from 5.8% to 5.7%, ECO News reports.

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