Bank of Portugal Notice No. 1/2025

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Published in: DR, 2nd Series, Part E, No. 12, of 17-01-2025 Mod. 99999910/T – 01/14

Index

Text of the Notice
Annex to the Notice

Text of the Notice

Through Notice No. 6/2024, the Bank of Portugal fulfilled its duties to disclose information to the public and to provide information to banking clients regarding the State's personal guarantee regime for facilitating the granting of housing credit for primary and permanent residence to young people up to 35 years of age, as provided for in Decree-Law No. 44/2024, of July 10, and regulated by Ordinance No. 236-A/2024/1, of September 27.

Among other aspects, it is established that institutions must make a set of information available, on a durable medium, to clients who, at the counter or through distance communication means, express interest in obtaining information about the State's personal guarantee regime, and for this purpose, may use the model contained in the annex to the aforementioned Notice (cf. Article 3, paragraph 3).

In the aforementioned information model, an illustrative example of the calculation formula for the amount covered by the State's personal guarantee is presented in situations where the financed amount is lower than the transaction amount. This example aimed to clarify banking clients regarding a relevant aspect of the regime regulated in paragraph 12 of Article 3 of Ordinance No. 236-A/2024/1, under which "[...] the amount of the State's personal guarantee cannot exceed 15% of the value of the transaction of the urban property or of an autonomous fraction of an urban property, and this percentage must be adjusted to a proportionally lower value in the case where the credit institution finances less than 100% of the transaction value".

Considering that the Directorate-General of Treasury and Finance, the entity providing the State's personal guarantee, has publicly disclosed an understanding on this matter, presenting illustrative examples that support banking clients in calculating the amount covered by the guarantee in each case, the Bank of Portugal considers that it no longer appears pertinent for institutions to provide the aforementioned information.

Given that this involves a slight modification to the content of the information model, whose use by institutions is merely voluntary, it is understood that this Notice does not affect "in a direct and immediate manner the legally protected rights or interests of citizens", and therefore, no hearing of interested parties was conducted, in accordance with the provisions of Article 100 of the Administrative Procedure Code, approved by Decree-Law No. 4/2015, of January 7, in its current wording.

Bank of Portugal Notice No. 1/2025

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Mod. 99999910/T – 01/14

Thus, in the exercise of the powers attributed to it by paragraph 4 of Article 77 of the General Regime of Credit Institutions and Financial Companies, approved by Decree-Law No. 298/92, of December 31, in its current wording, as well as by paragraph 4 of Article 14 and paragraph 3 of Article 22, both of Decree-Law No. 74-A/2017, of June 23, in its current wording, the Bank of Portugal determines the following:

Article 1.

Object
This Notice amends Notice No. 6/2024, of December 31.

Article 2.

Amendment to Notice No. 6/2024, of December 31 The information model approved in the annex to Notice No. 6/2024, of December 31, shall henceforth have the wording contained in the annex to this Notice.

Article 3.

Entry into Force
This Notice enters into force on the day following its publication.

January 7, 2025. - The Governor, Mário Centeno.

Annex to Bank of Portugal Notice No. 1/2025

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Mod. 99999910/T – 01/14

Annex to the Notice

Information Model on Public Guarantee in Housing Credit for Young People

Regime of the State's Personal Guarantee

Young people up to 35 years of age may benefit from a personal guarantee provided by the State to facilitate the granting of credit for the acquisition of their first primary and permanent residence, the value of which does not exceed 450,000 euros.

The public guarantee aims to allow financing by institutions of an amount between 85% and 100% (totality) of the transaction value of the property. The transaction value corresponds to the acquisition price or, if lower, the valuation value of the property at the time of credit contracting.

The guarantee (suretyship) is valid for a maximum of 10 years after the signing of the credit contract. The amount of the guarantee cannot exceed 15% of the transaction value of the property.

In the event of default on the contract, the State's guarantee may be invoked before the execution of the assets of the clients and guarantors.

Institutions are not obliged to grant credit, even if clients meet the requirements to access the State's guarantee.

Borrower Access Conditions

• Between 18 and 35 years of age (inclusive)
• Tax domicile in Portugal
• Cannot be owners of an urban property or of an autonomous fraction of an urban residential property
• Cannot have previously benefited from the public guarantee.
• Income that does not exceed the 8th bracket of the IRS (Personal Income Tax)
• Being exempt from submitting an income declaration, they must have monthly work income declared to Social Security or benefit from social benefits that do not exceed the monthly amount corresponding to 1/14 of the maximum limit value of the 8th bracket of the IRS.
• Regularized tax and contribution status

Conditions Applicable to the Contract

• Acquisition of the first primary and permanent residence, in which the transaction value of the property does not exceed 450,000 euros
• With mortgage guarantee
• Signed until December 31, 2026.

Conditions of the State's Personal Guarantee

The value covered by the guarantee cannot exceed 15% of the transaction value, with this percentage being adjusted to a proportionally lower value in the case where the institution finances less than 100% of the transaction value.

If the client fails to make the payments they committed to, the State, as surety, assumes responsibility for making those payments to the institution that granted the loan, up to the limit defined for the guarantee amount.

The client will always be responsible for paying the credit institution the value not covered by the guarantee and to the State for the value that the State may pay to the institution.

For other information about the State's personal guarantee regime, consult [indication of the spaces where the information disclosed by the institution is located], and the Banking Client Portal, at What is it and different regimes | Banking Client Portal and Frequently Asked Questions | Banking Client Portal (Credits > Housing Credit > Public guarantee in housing credit for young people up to 35 years of age)