Portugal Plans 6% VAT on New Housing Construction, Major Impact Expected from 2027

• The government plans to reduce VAT on construction from 23% to 6% for new housing projects, effective from 2026.
• The reduced VAT will apply to houses for sale up to €648,000 and rentals up to €2,300 per month, mainly targeting high-demand areas like Lisbon and Porto.
• The main impact of the VAT reduction is expected to be felt from 2027 due to project approval and construction timelines.
• The measure will be in effect until 2029 and is part of the “Building Portugal
• Renting and Simplification” package to boost affordable housing.
• The proposed law has not yet been formally submitted to parliament and is not included in the 2026 State Budget.

Source: theportugalnews.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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