Housing Tax Package: What Changes for Landlords, Tenants and Real Estate Developers

Latest Posts

View all posts

The new housing tax package in Portugal, recently approved, introduces a series of changes that directly impact the real estate market, affecting landlords, tenants and real estate developers. The main objective of these reforms is to adjust taxation to the current market context, encourage the construction of new housing and promote affordability to the property.

The main changes and their impact are:

1. Reduction of VAT on the Construction of Real Estate

One of the most outstanding points of the tax package is the reduction of VAT on the construction of real estate to 6%. This measure aims to support real estate developers and make construction projects more accessible and financially viable, especially for social housing and urban rehabilitation projects.

2. Changes in IMT and IRS

With regard to the Municipal Transaction Tax (IMT), the tax package brings adjustments in the tax brackets for the purchase of real estate, in order to stimulate the housing market for the lower classes. In addition, there are changes in the way landlords must calculate and declare their rental income, with clearer and more efficient rules for income taxation.

3. Tax Benefits for Landlords

The new regime offers tax benefits for landlords who choose to rent properties at more affordable prices. This includes the deduction of costs with maintenance and renovation of properties, as well as simplifications in the income statement. This measure aims to stimulate the rental market and encourage landlords to offer favorable conditions to tenants.

4. Specific Rules for Real Estate Developers

The package also establishes new rules for real estate developers who choose to sell properties with lower margins, especially in areas with a great lack of housing supply. For these cases, the regime offers tax relief, which makes the construction and sale of real estate more accessible and attractive to developers.

5. Incentive to Sustainability and Urban Rehabilitation

Another important point is the incentive to urban rehabilitation, with the introduction of tax exemptions for projects that involve the renovation of old buildings. Additionally, there is an emphasis on sustainability, with benefits for those who adopt eco-friendly and sustainable practices in building and rehabilitating real estate.

6. Impact on the Real Estate Market and Accessibility

With the combination of measures that reduce taxes and facilitate the construction and rental of real estate, the tax package is expected to have a positive impact on housing affordability. The objective is to foster the development of housing projects of different types, from low-cost housing to social interest, and provide relief for both investors and tenants.

Conclusion

The housing tax package represents a significant advance in the tax structure of the Portuguese real estate market. With measures that favor both the construction of new properties and rehabilitation and rental, the goal is to make housing more accessible, sustainable and attractive for everyone involved in the sector. With adjusted taxation, the Portuguese real estate market is expected to continue to grow and respond to the country's housing needs.

This package thus comes at a crucial time for the sector, which is facing challenges related to housing supply, sustainability and the growing demand for real estate in Portugal.