On September 27, 2024, Portugal formalized an innovative housing support initiative with Order No. 236-A/2024/1. This program makes homeownership significantly more accessible for young people looking to purchase their first home in the country. If you’re between 18 and 35 years old and considering putting down roots in Portugal, this government initiative could be your path to property ownership without the need to pay any money upfront.
The program has generated significant interest, with the four largest banks in Portugal already receiving more than 11,500 requests for these public guarantees.
Understanding the Public Guarantee System
The Portuguese government, working together with the Bank of Portugal and the Portuguese Banking Association, has established a public guarantee system that effectively enables 100% mortgage financing for qualifying young buyers.
This state support mechanism covers 15% of the property’s value—essentially replacing the down payment that banks typically require. By eliminating the need for a substantial upfront deposit, the program removes one of the most significant obstacles to homeownership for young people between 18 and 35 years old.
In the unlikely event of default, the state would assume responsibility for the 15% portion, while the lending bank would handle recovering the remaining balance.
This program is particularly noteworthy because it’s available to foreign residents who are registered for tax purposes in Portugal—not just Portuguese citizens.
Key Details About the Guarantee
To qualify for this program, you must meet these specific criteria:
- Be between 18 and 35 years old
- Be registered as a tax resident in Portugal (regardless of nationality)
- Have an annual income that doesn’t exceed the 8th tier of IRS (€81,000)
- Not own any other property
- Be purchasing a home valued at no more than €450,000
- Intend to use the property as your primary and permanent residence
Loan terms vary slightly by age. Applicants up to 30 years old can access mortgage terms up to 40 years, while those between 31-35 years old have a maximum term of 37 years
Banks will still enforce debt service ratio requirements, which ensures that your total monthly loan payments will not exceed 50% of your net income (with some exceptions possible).
The public guarantee also comes with several important conditions:
- It remains valid for 10 years from the start of your mortgage
- You can cancel it early if you fulfill all obligations before the end of this period
- If you make partial early repayments, the guarantee will be proportionally reduced
- The guarantee specifically covers the 15% that would typically be required as a down payment
Foreign Residents Already Benefiting
According to recent reports, young foreign residents are already taking advantage of this opportunity. Major Portuguese banks like Novo Banco, BPI, and Bankinter confirm they’ve received applications from international residents, with Brazilians representing the largest group of foreign applicants, followed by citizens from Portuguese-speaking African countries. At Novo Banco, approximately 10% of approved applications under this measure are from foreign citizens, with 90% of those being young Brazilians.
Since the beginning of the year, ERA, Portugal’s first real estate network, has had 10 requests per month, while others have registering more than 50 requests per month for information or feasibility. The ERA Portugal president noted the majority of inquiries come from Brazilians (62.5%) and citizens from Portuguese-speaking African countries (19.2%), with additional interest from Italian, French, Ukrainian, and Venezuelan residents.
The Importance of Portuguese Tax Residency
For those 18-35 year-olds considering this opportunity, establishing Portuguese tax residency is a crucial first step. There are multiple ways to get a Portuguese visa that we recommend for young people including the D2, D7, D8 programs. You may also even consider applying for this program after graduating from a Portuguese university if you are in the applicable age and tax brackets.
This not only qualifies you for the mortgage guarantee but potentially also for property tax (IMT) exemptions and stamp duty exemptions. Portuguese residency status allows you to build a local financial profile that banks recognize when evaluating mortgage applications.
After establishing Portuguese residency, research participating banks (including Novo Banco, BPI, and Bankinter). Then, verify eligibility with potential lenders, ensure your chosen property is within the €450,000 price cap, confirm your debt-to-income ratio meets the 50% requirement, and begin your property search with the knowledge that the traditional deposit barrier has been removed.
Final Thoughts
This initiative represents a significant opportunity for young internationals looking to make Portugal their home while building equity through property ownership. By eliminating the need for a substantial down payment, the Portuguese government has made the dream of homeownership more accessible to a new generation of residents. This initiative will certainly not alleviate the current housing crisis, but it will allow young residents get into a market that may have only seemed like a dream before the public guarantee system.
