Government Plans 6% VAT on Construction Until March 2026, Major Impact Expected in 2027

• Government plans to implement a 6% VAT rate on construction for new projects starting after early 2026, pending parliamentary approval.
• The reduced VAT will apply to homes for sale up to €648,000 or rentals with rents up to €2,300.
• The main impact of the VAT reduction is expected from 2027 due to project approval and construction timelines.
• The measure is part of the “Build Portugal – Renting and Simplification” package to boost affordable housing.
• The VAT reduction bill has not yet been submitted to parliament and is not included in the 2026 State Budget initiative.

Source: portugalpulse.com

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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