- Real estate remains a key driver of foreign investment in Portugal, especially in hospitality, student housing, and hybrid projects.
- Portugal offers a competitive legal and tax framework, but optimal returns require early and careful structuring, particularly regarding CIT, VAT, and property taxes.
- Most real estate transactions are VAT exempt, often leading to irrecoverable input VAT, especially for SICs, making transaction structuring crucial for VAT recovery.
- VAT exemption can be waived under specific conditions, allowing for VAT recovery in certain build-to-rent and operational rental income projects.
- Sectors like tourist resorts with mixed commercial aims and hotel share deals face particular VAT management challenges due to the complexity of transaction types and timing.
Source: internationaltaxreview.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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