Reduced 6% VAT on Housing May Favor Smaller Homes and Add Complexity, Expert Warns

• The new 6% VAT rate for moderately priced housing construction is complex and difficult to control, according to tax expert Leonardo Marques dos Santos.
• The measure may push the market towards smaller homes to fit the €648,000 price cap set by the government.
• Monitoring the use of materials and equipment for different projects will be challenging for tax authorities.
• The overall increase in tax benefits adds complexity and may not be efficient; direct subsidies could be a better alternative in some cases.
• Recent court rulings may lead to additional tax assessments for developers who applied the reduced VAT rate incorrectly.

Source: jornaldenegocios.pt

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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