20 February 2026

6% VAT on Construction: What Was Approved?
The Portuguese Parliament approved the application of a 6% VAT rate on the construction of new properties intended for primary and permanent residence, instead of the standard 23% rate.
This measure is part of the national housing package and aims to:
  • Encourage the construction of new homes
  • Increase housing supply
  • Reduce construction costs
  • Support families purchasing their primary residence
The reduced VAT applies to projects that meet specific criteria defined by the Government, including price limits and rules regarding property use.

Who Can Benefit from the 6% VAT?
The 6% VAT applies to construction projects initiated from 1 September 2025, remaining in force until 31 December 2029, with final invoicing in certain cases extending until 2032.
The benefit applies exclusively to properties acquired as a primary and permanent residence, and buyers must use the property as their main home for the minimum period established by law. Only projects that comply with value limits under the “moderate housing price” framework may qualify. Failure to comply may result in loss of the tax benefit and required fiscal regularisation.

New Responsibilities for Buyers
One of the main changes introduced during the legislative process is the transfer of responsibility to the buyer.
If the property is not used as a primary residence for the legally required period:
  • The tax benefit may be revoked
  • The VAT difference may need to be repaid
  • Additional fiscal penalties may apply
Buyers must therefore ensure full compliance with the legal criteria.

What Is the Impact on the Real Estate Market?
The VAT reduction may:
  • Improve the financial feasibility of new developments
  • Encourage developers to launch residential projects
  • Contribute to increasing housing supply
However, due to licensing and construction timelines, the most visible effects are expected between 2026 and 2027.
For buyers and investors, this framework may represent an opportunity — but careful planning and professional advice remain essential.

Where Does IMMOPO Fit In?
IMMOPO Real Estate continuously monitors legislative and fiscal developments impacting the Portuguese property market.
At IMMOPO, we closely follow market evolution and always advise our clients on the best solutions, whether buying, selling, or investing with confidence.
IMMOPO Real Estate, Mercado Imobiliário