Portugal's handing out €800m. Are you on the list?

After a summer of rising prices, the government has finally put a package on the table. It's Saturday, 19 September. Twenty-nine degrees. Air quality: 57 (Moderate). Here's what you need to know.

🗞️ PORTUGAL UNVEILS AN €800 MILLION COST-OF-LIVING PACKAGE

After months of fuel protests, record diesel prices and an inflation rate that keeps refusing to fall, Prime Minister Luís Montenegro has announced a package worth €800 million aimed squarely at the cost of living. It has four main planks: an income tax cut, a one-off pension bonus, continued fuel support, and a cheaper rail pass.

The income tax reduction, worth around €400 million, is the piece we flagged earlier this month, now confirmed. It trims the rates across the first six IRS (personal income tax) brackets by roughly 0.3 to 0.5 percentage points, applies retroactively to January, and reaches people in two stages: lower monthly withholding from November, so take-home pay rises, and the rest returned in next year's refund. It is aimed, in Montenegro's words, primarily at middle-class households.

For the retired and pension-age readers of this newsletter, the second plank matters most: a one-off pension supplement, also worth around €400 million, paid in December to more than two million pensioners. It is tiered by income, with smaller pensions getting the largest top-up, and does not apply to higher pensions above roughly €1,600 a month.

On fuel, the government is keeping the ISP (the tax on fuel) discounted until the end of the year and has added €38 million in targeted support for taxis, hauliers, farmers, firefighters and social-solidarity institutions. It is also extending the €20-a-month Green Rail Pass to urban rail services in Lisbon and Porto, though a start date still has not been confirmed.

For anyone living here, the practical read is mixed. The tax cut is real money most salaried workers will feel, first in the November payslip, then at tax time, and the December pension bonus is a genuine boost for retirees. But the package is deliberately targeted rather than universal. Montenegro explicitly ruled out the broader measures the opposition wanted, no cut to fuel duty of the kind Spain made, and no reduction of VAT on food or fuel, saying such moves would put the public finances at risk. And nothing in it touches the biggest cost most readers face, which is rent.

The politics are impossible to ignore. This lands with a minority government that has survived a no-confidence vote, weathered the fuel protests, and just watched a poll put it third behind the Socialists and Chega. A cost-of-living package is as much about being seen to act as it is about the economics.

Bottom line: a real tax cut and a December pension bonus that some readers will feel, wrapped in a deliberately targeted package. It is welcome, but it does not touch rent, and it stops short of the across-the-board fuel relief people have been asking for.

⚡ QUICK HITS

The EU wants to ban under-13s from social media. European Commission President Ursula von der Leyen used her State of the Union address to unveil a proposed "Kids Act" that would set different rules by age: children under 13 barred from social media entirely; 13 to 15-year-olds limited to parent-supervised "mini accounts" with fewer features and time limits; and platforms required to build in "safe design" protections for 15 to 18-year-olds. It is a proposal, not law, and would face a long road through Brussels, but it is the clearest signal yet that Europe intends to treat children's social media access as something to regulate rather than leave to the platforms. For parents in the newsletter, it is one to watch.

Lisbon has lost 8,300 short-term rental properties, and prices still haven't dropped. The number of active Alojamento Local (AL) registrations in the capital has fallen from around 20,000 to about 11,700 since the pandemic, partly through a clean-up of dormant "ghost" listings and partly through tighter restrictions on short-term lets. The striking part, as the head of the AL association points out, is that shrinking the market by a third did nothing to bring prices down: there is no neighbourhood in Lisbon where property got cheaper. It is more evidence for the argument that runs through every housing story here, the real problem is not Airbnb, it is that Portugal simply does not build enough homes.

The airport's new fixed taxi fares have won over the tourism industry. Following on from the flat-fare system we covered last week, the Lisbon Tourism Association has now backed it, saying predictable pricing makes a better first impression and protects honest drivers from being tarred by the scammers. The confirmed fares, from 15 October: €16 by day and €20 at night into central Lisbon (Zone 1), €19 and €23 for the outer parishes (Zone 2), and set rates further out too, around €53 to €64 to Sintra, Estoril or Cascais.

AIMA court cases are being spread across the country. Under a proposed court reform, legal cases involving the immigration agency, currently all funnelled to a single overloaded court in Lisbon, would instead be handled by specialised sections in courts around the country, assigned by where the person bringing the case lives. The government is not creating standalone immigration courts but building expert sections inside existing ones to deal with residence, removal and asylum cases. For the many readers who have watched an AIMA appeal disappear into the Lisbon backlog, spreading the load and building specialist expertise is, at least on paper, a sensible fix.

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🍽️ SPOT OF THE DAY

FOCACCIA IN GIRO (CAMPO DE SANTA CLARA)

Here is a Saturday plan that makes itself. The Feira da Ladra, Lisbon's centuries-old flea market, takes over Campo de Santa Clara every Tuesday and Saturday, a sprawl of antiques, second-hand oddities, records and junk-you-suddenly-need. And sitting right in the middle of it, at number 141, is Focaccia in Giro, an Italian-run spot built for exactly this: shop the market, then reward yourself, or fuel up first and dive in.

The focaccia is the thing, baked to a family recipe from the owner's grandmother, Giovanna, fluffy inside and crisp at the edges, and loaded with the likes of smoked salmon, cod, mortadella, or a fully vegetable version for anyone off meat. Reviewers rave just as hard about the hummus and a raspberry cheesecake that gets described in enthusastic terms. There is proper coffee, craft beer if you are treating the market as a leisurely affair, and a few outdoor tables with a water view across the road.

It is open Tuesday to Saturday from 10am, and Sundays too, but closed Mondays, which lines up neatly with the market's Tuesday and Saturday schedule.

→ Find them here ←

Insider tip: do the market first, early, before the sun and the crowds peak, then land at Focaccia in Giro mid-morning with your finds. Grab an outdoor table for the water view, and if the raspberry cheesecake is on, that is your reward for haggling well.

📅 WHAT'S ON

See you tomorrow morning.

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