Lisbon Secures €275M Real Estate Investment as Developers Push for Tax Cuts and Licensing Reform

Lisbon is reinforcing its status as a prime destination for real estate investment, with the announcement of a €275 million residential development that could reshape the city’s urban landscape. The project, named NoLiPa, is being spearheaded by developer Avenue and represents the largest residential venture in the company’s Portuguese portfolio to date.

Strategically located between Campo Grande and Quinta das Conchas and Lilases Park, NoLiPa will span 63,500 square meters and comprise 466 residential units across seven buildings. Designed to cater to a wide demographic, apartment types will range from compact studios (T0) to spacious four-bedroom units (T4), priced between €320,000 and €1 million, with an average of €7,000 per square meter.

Despite soaring land and construction costs, the project is already drawing strong interest; over 90% of early inquiries have come from Portuguese buyers. In addition to housing, NoLiPa will feature commercial and service spaces, including offices or potentially hotel facilities. Backed by Aermont Capital, a prominent European asset management firm, construction is expected to begin this quarter, with full completion slated for 2027.

However, as investment pours into Lisbon’s real estate market, industry voices are growing louder in calling for regulatory and tax reforms. Developers cite complex licensing procedures and high VAT rates as key contributors to Portugal’s housing affordability crisis. Current data suggests that licensing delays can add more than €500 per square meter to housing costs.

To address these concerns, the government launched the Simplex Urbanístico program in March 2024, aimed at streamlining urban development approvals. Early results are promising Lisbon saw a 24.8% increase in project approvals from March to December 2024 compared to the previous year. Still, industry leaders argue that further reforms are critical.

At the heart of these demands is a proposed VAT reduction on construction from 23% to 6%, part of the government’s Construir Portugal initiative. If enacted, this tax cut could reduce housing costs by up to €700 per square meter, according to sector estimates.

Developers argue that combining faster approvals with lower construction taxes would enable them to deliver more affordable housing at scale. They emphasize that these measures are not just about business efficiency they are essential to solving Portugal’s broader housing challenges.

Lisbon’s unique blend of domestic demand, strategic location, and investor confidence continues to position it as a hub for transformative urban development. The success of initiatives like NoLiPa will ultimately depend not only on market dynamics but also on whether public policy evolves to meet the pace of private investment.