Urban Land and the Land Law: The New Legal Landscape in Portugal
The recent revision of the Legal Framework for Territorial Management Instruments (RJIGT), often associated with the so-called “land law,” has brought significant changes to the management of urban land in Portugal. Despite intense debate and heightened expectations, both municipalities and real estate developers express reservations about the effectiveness of these changes in addressing the housing emergency the country is facing.

What has changed in the land law?
The amendments introduced by Decree-Law no. 117/2024, later adjusted by Law no. 53-A/2025, aim to facilitate the reclassification of rural land to urban land, especially for housing purposes. Among the most relevant innovations is the creation of a special regime for this reclassification, which is conditioned on demonstrating the economic and financial viability of the projects and assessing the urban impact on existing infrastructure.

Another significant change is the requirement for contiguity with existing urban land and the replacement of the “moderate value” criterion with that of affordable rental or housing at controlled costs. Additionally, the opinion of the Regional Coordination and Development Commission (CCDR) has become mandatory—although not binding—for most reclassification processes.

The deadline for completing urbanization works on reclassified land has also been reduced from five to four years, with the possibility of a one-year extension. These measures are intended to accelerate the development of urban land, but they raise questions about their actual applicability.

Impact on municipalities
For municipalities, the amendments to the RJIGT represent an increase in autonomy in land management, but they also bring new responsibilities and challenges. The diversity of territorial realities requires flexible solutions adapted to each local context. In metropolitan areas like Lisbon and Porto, where urban pressure is greater, the need to balance urban development with environmental protection and the containment of urban perimeters becomes even more pressing.

Many municipalities consider that the new rules do not solve the structural problems of access to housing. Difficulties related to the slowness of licensing processes, the scarcity of available urban land, and the lack of adequate infrastructure persist. Furthermore, the existence of overlapping exception regimes complicates the practical application of the land law and generates legal uncertainty.

Perspective of real estate developers
From the developers’ perspective, the changes to the land law are seen as a limited opportunity. The requirement to allocate a large percentage of buildable area to public or controlled-cost housing reduces the attractiveness of private investments. The model of 70% for affordable housing and 30% for other uses is considered unfeasible for most projects, mainly due to high construction costs and uncertainty regarding future profitability.

Although developers acknowledge the potential of the new rules for cooperative or socially impactful housing projects, most believe the impact will be minimal if the model is not adjusted. The risks associated with long-term investments, in a context of already compressed margins, lead many investors to opt for other solutions or to wait for greater legislative stability.

Challenges and opportunities for the future
The revision of the land law and the management of urban land remain central topics in the debate on the future of Portuguese cities. Balancing sustainable urban development, the protection of agricultural land, and responding to the housing crisis requires an integrated and innovative approach.

Simplifying reclassification processes, clarifying municipal responsibilities, and creating incentives for urban rehabilitation are possible paths to promoting a more efficient use of urban land. In addition, coordination between the public and private sectors will be essential to ensure that legislative changes translate into more affordable housing and a better quality of life for the population.

The new land law represents an important, but still insufficient, step toward tackling the challenges of urban planning in Portugal. Only with a strategic vision shared among all stakeholders will it be possible to transform urban land into true opportunities for sustainable development and social inclusion.