Prime Minister Luís Montenegro announced a series of housing measures on Thursday, including a reduction of VAT to 6% for construction and an increase in IMT for property purchases by foreigners.
“The policy we are implementing already has several decisions underway, but we feel that a bigger push, more daring, is necessary,” stated the Prime Minister at a press conference during the Council of Ministers, which “is still ongoing.”
The measures aim to “continue to simplify licensing processes,” detailed the Prime Minister, deferring further details about the framework of this measure for later. “Our intention is to have more agile procedures, with less prior control,” he pointed out.
VAT Reduction to 6% and Increase in IMT
The Prime Minister announced a reduction of VAT to 6% for construction up to 648,000 euros. “The 6% VAT rate will also apply to rentals up to 2,300 euros,” meaning “construction or rehabilitation of buildings for rent up to this amount.”
“It is a shock policy initiative. We want to shake up the market,” said Montenegro.
Luís Montenegro also announced a “increase in IMT for housing purchases by non-resident citizens in Portugal“, excluding emigrants.
Watch the Council of Ministers’ Press Conference Here:
During his intervention in the biweekly debate in the Assembly of the Republic on Wednesday, the Prime Minister had already announced “the reduction of the IRS rate from 25% to 10% on rental contracts for moderate rents.”
Luís Montenegro also declared an increase in tax deductions for tenants, to which Porta a Porta responded by highlighting the “end of the maximum cap of 2% rent increase” for new rental contracts that have been on the market for the last five years and have rents exceeding those provided for in the Rent Support Program.
The elimination of capital gains tax on the sale of properties “if the amount is reinvested in properties for rent at moderate prices” and “the simplification of licensing in the legal framework of urbanization and construction, shortening deadlines and streamlining processes” are other measures presented by the Government.
[News in progress]
