Taxes, housing and tuition fees: 2027 budget measures impact family budgets in Portugal

The 2027 draft State Budget for Portugal outlines several changes to the country's tax system, minimum wage, and social benefits that will affect family budgets. One of the key measures is the update of the Income Tax (IRS) brackets, which will increase the income limits for each tax bracket by 3.88%. This update is designed to benefit all taxpayers, as it is more progressive than the wage increases agreed upon in the Tripartite Agreement on Wage Enhancement and Economic Growth.

In addition to the tax changes, the national minimum wage will be increased to 970 euros per month, a 50 euro raise from the current 920 euros. This increase aligns with the wage enhancement agreement reached in Social Concertation and will provide a boost to the net income of minimum wage earners, depending on their specific tax situation. Public sector workers will see a 2.3% increase in their salaries, raising their basic pay to 995.51 euros per month.

Pensioners in Portugal will also see an increase in their monthly pensions, with an estimated rise of around 3%. This increase will add approximately 824 million euros to public spending in 2027 and is expected to be finalized once the final data on inflation and economic growth are available. Moreover, pensioners with incomes up to 1,611.39 euros per month will receive an extraordinary supplement of 200 euros, while those with higher pensions will receive varying amounts based on their specific income levels.

For younger people looking to rent housing, the Solidarity Supplement for Older People (CSI) will see a 50 euro increase, raising the monthly reference amount from 670 to 720 euros. This top-up is aimed at bolstering the incomes of older people with the lowest incomes, while the Government aims to raise the reference value to 870 euros by 2029.

Finally, the budget proposal suggests a 59.5 million euro increase in spending on child benefit, driven by inflation and a projected rise in the number of beneficiaries. This increase will be linked to the indexation of amounts to inflation and the forecasted change in inflation. Overall, these measures aim to strengthen family budgets in Portugal by addressing various aspects of taxes, housing, and social benefits.