Portugal: Finance Minister defends VAT policy as housing prices rise

Portuguese Finance Minister Joaquim Miranda Sarmento has defended his current fiscal stance against opposition criticism regarding fuel VAT. Addressing the Assembly of the Republic, Sarmento argued that the economic circumstances in 2024 differ significantly from 2022, when he was in the opposition. He noted that inflation for energy goods has dropped from approximately 25% to 12%, and food inflation has decreased from 12% to nearly 2.5%. He further stated that opposition proposals to lower VAT on fuel and essential foods would cost the state approximately 2 billion euros annually.

Simultaneously, recent data from the National Institute of Statistics (INE) indicates that housing prices in Portugal rose by 16.5% in the second quarter compared to the same period last year. While the rate of increase has slowed slightly, house transactions have declined for three consecutive quarters. This trend suggests that government measures intended to stimulate the supply of new and used homes, announced in late 2025, have not yet yielded significant market effects.