VAT to rise to 6% on housing construction and rehabilitation

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The Government Program foresees the temporary application of VAT at the minimum rate of 6% on construction and rehabilitation works for permanent housing, according to the document released today.

In the document released today, the PSD/CDS-PP government led by Luís Montenegro says it will create a temporary scheme to reduce tax costs on “construction or rehabilitation work on properties intended for permanent habitation”, regardless of where they are located, adding that it will compensate local authorities for the loss of revenue.

Among the measures is the application of 6% VAT to construction and rehabilitation works and services, as was already included in AD’s electoral program (pre-election coalition between PSD, CDS-PP and PPM), also referring to the “extension of deductibility”.

It also provides for the “substantial reduction or elimination” of urbanization, building, use and occupation taxes, without specifying how this will be done.

The Government Program also foresees a Public-Private Partnership program for the construction and rehabilitation “on a large scale of both general housing and student accommodation” and the facilitation of “new housing concepts in the Portuguese market” (giving as examples the construction of houses for rent, moderate cost housing, modular housing, housing cooperatives and flexible use of student residences).

It will also study the legislative framework for urban licensing and control in order to possibly simplify processes.

Today’s Government Program does not indicate the financial impact of these measures.

In the document, the government states that it will also increase the scope of the Porta 65 program within the limits of its application, without providing any further information.

The Program of the XXIV Constitutional Government was delivered today by the Minister of Parliamentary Affairs, Pedro Duarte, to the President of the Assembly of the Republic, José Pedro Aguiar-Branco.

The document is not voted on in the Assembly of the Republic, only considered, but the parliamentary groups can present motions to reject the program, whose approval requires “an absolute majority of the deputies in office”.

Only after its program has been examined by the Assembly of the Republic will the government be fully functional and, until then, it must limit itself to “carrying out acts that are strictly necessary to ensure the management of public affairs”.

Hervé Hubert
Hervé Hubert
Hervé Hubert is a 55-year-old writer and journalist based in Porto, Portugal. Born in France, he brings a unique blend of French and Portuguese perspectives to his work. Education Hervé studied Journalism and Literature at the University of Lyon in France. After completing his studies, he gained valuable experience working with various French media outlets (Portugal France also). Career He worked for several years as a journalist in France before making the move to Portugal. In Porto, he joined the Portugal Pulse team as a staff writer. Skills Hervé specializes in storytelling, investigative journalism, and cultural commentary. He has a flair for capturing complex issues in a relatable way. Personal Life He currently resides in Porto and enjoys the city's rich culture, from Fado music to Francesinha cuisine. Hervé continues to maintain strong ties to his French heritage, often traveling back to France for family visits and cultural exploration. With his unique background and diverse skill set, Hervé Hubert adds a layered, multicultural lens to every story he covers.

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