Yesterday, the Portuguese Council of Ministers approved a set of housing measures aimed at stabilizing real estate prices and addressing the housing crisis linked to high inflation and speculation in the real estate market. These measures will provide access to decent housing for the entire society.
Although we have some doubts about the scope of the proposed measures, particularly because the final text of the decision is not yet available and may be subject to change. There are measures whose applicability requires clarification, there are some important considerations worth highlighting.
Among the decisions of great relevance to everyone, whether investors, residents or non-residents, or potential buyers for their own use, we can highlight the following:
- Reduction of the VAT rate to 6% on the construction of housing for sale up to €648,000 or, in the case of rentals, for rents up to €2,300. This tax regime is in effect until 2029.
- Increase in the Municipal Property Transfer Tax (IMT) on home purchases by non-residents of Portugal, excluding emigrants.
- Exemption from payment of the additional Municipal Property Tax (AIMI) for rental properties worth up to €2,300.
- Increase in personal income tax deductions for rental housing: €900 in 2026 and €1,000 in 2027.
- Reduction in the personal income tax rate for landlords with moderate rents: from 25% to 10%.
- Support for temporary housing for construction workers.
- Ongoing work with the banking sector to make access to housing loans and construction financing more flexible.
It's important to clarify the scope of the government's intentions, and questions about the percentage of the IMT increase for property purchases by non-residents, or the scope of the term "dwellings for sale" for VAT purposes at 6% and its applicability to construction contracts, still lack a concrete answer.
However, other measures, while not final, seem to suggest that good news is coming soon in the rental investor market, and the 10% rate for moderate rents (up to €2,300.00) is an excellent decision.
At first glance, the measures seem interesting and promising.
We will have news in the coming days, and we eagerly await further developments and will inform you as soon as we have more answers.
