The State Budget for 2026 (OE2026) has been approved by the Portuguese Parliament and promulgated by the President of the Republic, entering into force on 1 January 2026. The Budget sets out the main fiscal, economic and social policy priorities for the year ahead, with direct implications for individuals, businesses and markets.
Key measures
- Personal Income Tax (IRS): reduction of intermediate marginal tax rates and an update of tax brackets above the inflation rate, resulting in a lower tax burden on employment income.
- Social policies: update of pensions and reinforcement of social benefits, including the Solidarity Supplement for the Elderly.
- Housing: tax incentives and measures to stimulate construction and rental markets, aimed at addressing structural constraints in housing supply.
- Education and mobility: freeze on higher education tuition fees and an extension of toll exemptions on certain motorway sections.
Economic outlook
The Government forecasts moderate economic growth in 2026, the maintenance of budgetary balance and a gradual reduction of public debt as a percentage of GDP. External projections, however, highlight potential risks associated with the permanent nature of certain fiscal and social measures.
Practical impact
- Individuals: lower direct tax burden and strengthened social protection, increasing disposable income.
- Businesses: enhanced opportunities in sectors such as construction and real estate, with potential positive effects on investment and economic activity.
The full text of the State Budget Law for 2026 (Law no. 73-A/2025) is available on the official Government website.