Government Plans 6% VAT Rate for Housing Construction by Early 2026, Major Impact in 2027

• The government plans to implement a 6% VAT rate for construction by the first quarter of 2026, pending parliamentary approval.
• The reduced VAT will apply to new housing projects submitted after the law takes effect, but the major impact is expected from 2027 due to project approval and construction timelines.
• The 6% VAT rate will apply to homes for sale up to €648,000 and rentals up to €2,300 per month, mainly targeting high-demand areas like Lisbon and Porto.
• This measure is part of the “Building Portugal
• Renting and Simplification” package to boost affordable housing supply.
• The proposed VAT reduction law has not yet been submitted to parliament and is not included in the 2026 State Budget.

Source: sulinformacao.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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