Conditions for access to subsidised housing loans and subsidised loans for young people, as approved by Decree-Law No. 6/2026 of 29 January

The Government of Cape Verde has approved and published Decree-Law No. 6/2026 of 29 January, which establishes a new legal framework governing access to subsidised loans and subsidised housing loans for young people, thereby reinforcing the State’s constitutional commitment to the right to decent housing, as enshrined in Article 72 of the Constitution of the Republic.

The legislation comes at a time of growing economic pressure on Cape Verdean households and aims to bring public support measures into line with the current reality of the housing market, taking into account the impact of successive international crises on citizens’ purchasing power, particularly that of young people.

Housing as a strategic priority for this parliamentary term

Housing has been identified by the Executive as one of the key priorities for this legislative term, recognised as an essential pillar for improving quality of life, social stability and economic development. The new scheme forms part of a broader programme that includes measures such as support for assisted self-build schemes, interest subsidies for the construction and purchase of permanent owner-occupied homes, and the adaptation of public policies to the specific socio-economic circumstances of each island.

According to the Government, this is a piece of legislation with a significant social impact, in that it directly affects the well-being of families and helps to facilitate access to home ownership, particularly for low- and middle-income households.

What changes under Decree-Law No. 6/2026

The new Decree-Law repeals the previous regime in its entirety – as set out in Decree-Law No. 37/2010 and its amendments – and introduces a regulatory framework that is more up-to-date, consistent and tailored to current needs.

The legislation sets out the conditions for eligibility for the interest subsidy on loans intended for:

• the purchase, construction, renovation, improvement or extension of one’s own permanent home;
• acquisition of land for housing development.

The scheme also applies to contracts entered into under Decree-Law No. 41/2022, ensuring continuity and legal certainty for beneficiaries already covered by it.

Subsidised loans and subsidised youth loans

The system is now based on three distinct schemes:

• standard credit scheme;
• subsidised credit scheme;
• subsidised youth credit scheme.

In the case of the subsidised youth loan, households in which none of the account holders is over 35 years of age are eligible, with an automatic transition to the general subsidised scheme permitted once that age limit is exceeded.

The main advantages include:

• financing of up to 100 per cent of the value of the property or land, in certain cases;
• the possibility of bail for young people when the debt-to-income ratio exceeds the set limits;
•         an interest subsidy of up to 55 per cent under the youth scheme and 50 per cent under the subsidised scheme, funded by the State Budget.

Rules on monitoring, transparency and accountability:

The legislation sets out strict rules on eligibility, continued entitlement and monitoring, requiring annual proof of income and household composition. Making false declarations results in the immediate loss of the benefit and the obligation to repay the amounts received to the State, plus a penalty.

The Directorate-General for the Treasury plays a central role in monitoring and verifying the scheme, in conjunction with the Directorate-General for Taxation, and provision is also made for the publication of annual statistical reports on subsidised loans.

Continuity and protection for current beneficiaries

Decree-Law No. 6/2026 sets out transitional provisions ensuring that subsidy arrangements granted under previous schemes are automatically transferred to the new scheme, with subsidies continuing until the end of the loans’ term, thereby guaranteeing stability and protection for beneficiaries.

With this new scheme, the Government reaffirms its commitment to inclusive public policies aimed at promoting access to decent housing as a fundamental right and an essential tool for social cohesion and sustainable development.