- Portugal approved new housing tax incentives to increase the supply of residential property, through Law No. 9-A/2026 and Decree-Law No. 97/2026.
- A reduced VAT rate (6% mainland / 4% islands) now applies to construction or rehabilitation of homes for sale as own and permanent residence or for residential rental, subject to price/rent caps and several conditions.
- For sales, the property must meet IMT own-residence rules, be sold within 24 months of completion documentation, and the reduced VAT must be stated in the deed.
- For rentals, the lease must be VAT-exempt, reported to the tax authority, start within 24 months, and remain in residential lease for at least 36 months within the first five years, with no subletting above the cap.
- These VAT measures start on July 1, 2026, end on December 31, 2032, and apply only to eligible works started between September 25, 2025 and December 31, 2029.
Source: taxand.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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