The Council of Ministers approved this Friday a proposed law aimed at encouraging the construction of housing and renting, through a tax reduction, announced the Minister of the Presidency.
The proposed law, which will go to parliament, includes a legislative authorization to reduce existing tax burdens on the construction of houses intended for housing and housing rental, explained minister António Leitão Amaro, at the end of the meeting.
This measure comes after, in September, the Government has approved the “Build Portugal – Leasing and Simplification” program, which provided for the implementation of a VAT rate of 6% “in the construction of houses for sale up to 648 thousand euros or, in the case of rental, for rents up to 2,300 euros”in force until 2029.
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At today’s press conference, Leitão Amaro explained that the Government approved the diploma that “greatly” reduces taxation in this sector. Projects whose licensing or request for prior information are made from the date of announcement, after September 25, and whose expenses are issued from January 1, 2026, will be covered, even if approval by the Assembly of the Republic is made after this deadline.
The measures aim to create a “framework of stability for investors who promote” rental housing and “very significant tax relief for moderately priced houses”, with “moderate income” up to 2,300 euros and houses for sale up to 648,000 euros, he said.
“We didn’t want to create another little program to cover a few more small tens of thousands of homes, We really want tax relief that covers the Portuguese in the vast majority”, he argued, to justify the executive’s initiative.
Leitão Amaro stressed that “it was not possible for the Portuguese to complain” about expensive housing and the State continued “to make houses more expensive with so many taxes”.
The Council of Ministers also approved another diploma to create a new organization and construction regime, announced Leitão Amaro.
This proposal will bring a “cut in bureaucracy so that urban operations can be carried out, so that construction and rehabilitation can be carried out in Portugal” more quickly and with less context costs, he said.
The two diplomas, he added, are “essential instruments for building more houses”.
The two diplomas will have to be assessed by parliament, which, in the case of taxes, has reservations about the legislation to be amended when it involves changes in taxation.