{"id":5219,"date":"2026-06-05T09:30:00","date_gmt":"2026-06-05T09:30:00","guid":{"rendered":"https:\/\/tiagorcorreia.com\/tmp-en-4662\/"},"modified":"2026-07-03T18:17:28","modified_gmt":"2026-07-03T18:17:28","slug":"6-percent-vat-construction-2026-guide","status":"publish","type":"post","link":"https:\/\/tiagorcorreia.com\/en\/6-percent-vat-construction-2026-guide\/","title":{"rendered":"6% VAT on construction: the practical 2026 guide (DL 97\/2026)"},"content":{"rendered":"<div class=\"trc-art-meta\"><span><strong>Investment<\/strong><\/span><span>5 min read<\/span><span>Updated June 2026<\/span><\/div>\n<p>The 6% VAT on housing construction and rehabilitation is in force: Decree-Law n.\u00ba 97\/2026, published on 20 May, set the rules \u2014 and the difference between applying 23% or 6% represents, on a single project, amounts that can reach tens of thousands of euros. This guide explains who qualifies, how the refund works for self-build, and the mistakes that forfeit the benefit.<\/p>\n<div class=\"trc-art-summary\"><span class=\"trc-art-label\">Executive summary<\/span><\/p>\n<ul class=\"list\">\n<li><strong>6% rate<\/strong> on the construction and rehabilitation of housing at moderate prices \u2014 applicable from July 2026, with retroactive effect to January.<\/li>\n<li><strong>Caps<\/strong> \u2014 sale up to \u20ac660,982 (permanent own home) or rent up to \u20ac2,300\/month.<\/li>\n<li><strong>Time window<\/strong> \u2014 works whose procedural initiative occurs between 25-09-2025 and 31-12-2029; VAT chargeable until 31-12-2032.<\/li>\n<li><strong>Self-build<\/strong> \u2014 pays 23% and requests the refund of the difference after the use permit.<\/li>\n<li><strong>Consequences of non-compliance<\/strong> \u2014 selling above the cap or leaving the home before the deadline forfeits the benefit and aggravates the IMT.<\/li>\n<\/ul>\n<\/div>\n<h2>1. What the 6% VAT regime is<\/h2>\n<p><a href=\"https:\/\/diariodarepublica.pt\/dr\/detalhe\/decreto-lei\/97-2026-1124493227\" target=\"_blank\" rel=\"noopener\">Decreto-Lei n.\u00ba 97\/2026<\/a> approved a tax-relief package to boost housing supply: besides the reduced VAT on building contracts, it includes 10% IRS on rents, new exemptions and the Investment Contracts for Rental. The centrepiece is the <strong>6%<\/strong> rate on construction or rehabilitation contracts for properties intended for sale as a permanent own home or for residential rental.<\/p>\n<h2>2. Who qualifies \u2014 the requirements<\/h2>\n<div class=\"trc-art-table\">\n<table>\n<thead>\n<tr>\n<th>Requirement<\/th>\n<th>Rule<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><strong>Destination: sale<\/strong><\/td>\n<td>Buyer\u2019s permanent own home, with a sale price up to <strong>\u20ac660,982<\/strong> (the 2nd IMT bracket limit) and the sale completed within <strong>24 months<\/strong> of the use permit<\/td>\n<\/tr>\n<tr>\n<td><strong>Destination: rental<\/strong><\/td>\n<td>Monthly rent up to <strong>\u20ac2,300<\/strong> \u2014 around 2.5 times the 2026 minimum wage<\/td>\n<\/tr>\n<tr>\n<td><strong>Time window<\/strong><\/td>\n<td>Procedural initiative of the works between <strong>25 September 2025<\/strong> and <strong>31 December 2029<\/strong><\/td>\n<\/tr>\n<tr>\n<td><strong>VAT chargeability<\/strong><\/td>\n<td>From 1 January 2026 until <strong>31 December 2032<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p class=\"trc-src\">Source: <a href=\"https:\/\/diariodarepublica.pt\/dr\/detalhe\/decreto-lei\/97-2026-1124493227\" target=\"_blank\" rel=\"noopener\">Decreto-Lei n.\u00ba 97\/2026, of 20 May \u2014 Di\u00e1rio da Rep\u00fablica<\/a>.<\/p>\n<\/div>\n<h2>3. Direct sale at 6% or refund: two paths<\/h2>\n<p>For developers and eligible contracts, the reduced rate applies directly to the works\u2019 invoicing. For those building their own home outside a business activity, the mechanism is the <strong>refund<\/strong>: you pay the invoices at 23% and, after the use permit, ask the Tax Authority for the difference back \u2014 the request must be made within 12 months, and the AT has 150 days to refund.<\/p>\n<p>On both paths, documentary organisation is decisive: itemised invoices, linked to the permit, with the works identified. Disorganised project accounting compromises the exercise of the right and can lead to litigation.<\/p>\n<div class=\"blog-details__wrapper\">\n<div class=\"row\">\n<div class=\"col-lg-8\">\n<div class=\"media\"><img decoding=\"async\" src=\"\/wp-content\/uploads\/2026\/06\/trc-iva-6-construcao-2026.webp\" alt=\"Housing interior at finishing stage with natural light\" loading=\"lazy\"><\/div>\n<\/div>\n<div class=\"col-lg-4\">\n<div class=\"media\"><img decoding=\"async\" src=\"\/wp-content\/uploads\/2026\/06\/trc-iva-materiais.webp\" alt=\"Detail of construction materials and oak flooring\" loading=\"lazy\"><\/div>\n<\/div>\n<\/div>\n<\/div>\n<h2>4. What it is worth, in numbers<\/h2>\n<p>An illustrative example: a \u20ac250,000 building contract pays \u20ac57,500 of VAT at 23% \u2014 and \u20ac15,000 at 6%. That is a <strong>\u20ac42,500 difference<\/strong>, enough for the finishes, the energy efficiency or simply for not overrunning the budget. The bigger the works, the bigger the effect \u2014 as long as the property\u2019s final value respects the cap.<\/p>\n<div class=\"trc-diagram\">\n\u20ac250,000 contract \u2014 VAT payable<br \/>\n23%<\/p>\n<p>\u20ac57,500<br \/>\n6%<\/p>\n<p>\u20ac15,000<\/p>\n<p>saving: \u20ac42,500<br \/>\nillustrative values, excluding ancillary costs\n<\/p><\/div>\n<p class=\"trc-art-caption\">The difference between the two rates on a single project \u2014 drawn to scale.<\/p>\n<blockquote>\n<h2 class=\"title\">\u201cThe 6% VAT is won at design stage: the budget that respects the cap is designed, not wished for.\u201d<\/h2>\n<h3>Tiago R. Correia<\/h3>\n<p>Architect<\/p><\/blockquote>\n<h2>5. The mistakes that forfeit the benefit<\/h2>\n<p><strong>Overrunning above the cap.<\/strong> A poorly chosen construction system makes the works more expensive and pushes the sale value beyond \u20ac660,982. Control starts in the detailed design and the bill of quantities \u2014 see our guide on <a href=\"\/en\/cost-build-house-2026-portugal\/\">how much it costs to build a house<\/a>.<\/p>\n<p><strong>Missing the deadlines.<\/strong> The property must be sold or rented within 24 months of the use permit \u2014 commercial planning starts while still on site.<\/p>\n<p><strong>Leaving the home too early.<\/strong> Whoever buys with 6% VAT and stops using the property as their permanent own home is subject to a 10-point aggravation of the IMT.<\/p>\n<p><strong>Weak documentation.<\/strong> In the refund, non-itemised invoices or invoices detached from the permit reduce the amount returned.<\/p>\n<div class=\"trc-art-cta-inline\">\n<p>Launching a project and want to keep it eligible? Start with the numbers: <a href=\"\/quanto-custa-um-projecto-de-arquitectura-em-portugal-honorarios-e-calculo-2025\/\">how much the design costs<\/a> and <a href=\"\/en\/building-permitting-portugal-2026-guide\/\">how permitting works in 2026<\/a>.<\/p>\n<\/div>\n<h2>What already existed \u2014 and what comes next<\/h2>\n<p>The 2026 regime does not start from zero: rehabilitation in ARUs already benefited from a reduced rate on certain contracts, and that framework remains relevant for existing buildings in rehabilitation areas. The novelty is in new construction at moderate prices \u2014 and in what comes next: from <strong>1 September 2026<\/strong>, the same <a href=\"https:\/\/diariodarepublica.pt\/dr\/detalhe\/decreto-lei\/97-2026-1124493227\" target=\"_blank\" rel=\"noopener\">DL 97\/2026<\/a> creates the Investment Contracts for Rental (CIA), with 6% VAT, IMT exemption and eight years of IMI exemption for those who build to rent within the rules.<\/p>\n<div class=\"trc-art-faq\"><span class=\"trc-art-label\">Frequently asked questions<\/span><\/p>\n<h3>My works started before September 2025 \u2014 do I qualify?<\/h3>\n<p>The regime covers works whose procedural initiative occurs from 25 September 2025. Earlier processes are, as a rule, outside \u2014 confirm your case\u2019s specific framework.<\/p>\n<h3>Can I rent instead of selling?<\/h3>\n<p>Yes \u2014 the regime also applies to construction for residential rental, with a monthly rent up to \u20ac2,300.<\/p>\n<h3>What if the property ends up worth more than the cap?<\/h3>\n<p>The benefit presupposes respect for the limits; exceeding them forfeits the regime and implies regularisation. That is exactly why cost control at design stage is decisive.<\/p>\n<h3>Who validates whether my project is eligible?<\/h3>\n<p>Eligibility crosses architecture, permitting and taxation: the technical framework is ours; the tax component should be closed with your accountant.<\/p>\n<\/div>\n<div class=\"trc-art-cta\"><span class=\"trc-art-cta-title\">Building within the 6% regime<\/span><\/p>\n<p>We design the project and the budget to respect the eligibility limits while keeping the quality of the result. Send us the details of your plot or building.<\/p>\n<p><a class=\"trc-art-btn\" href=\"\/en\/contact\/\">Validate my project<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Investment5 min readUpdated June 2026 The 6% VAT on housing construction and rehabilitation is in force: Decree-Law n.\u00ba 97\/2026, published on 20 May, set the rules \u2014 and the difference between applying 23% or 6% represents, on a single project, amounts that can reach tens of thousands of euros. This guide explains who qualifies, how [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":4844,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[126,122],"tags":[],"class_list":["post-5219","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legislation-permitting","category-real-estate-investment"],"_links":{"self":[{"href":"https:\/\/tiagorcorreia.com\/en\/wp-json\/wp\/v2\/posts\/5219","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tiagorcorreia.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tiagorcorreia.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tiagorcorreia.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tiagorcorreia.com\/en\/wp-json\/wp\/v2\/comments?post=5219"}],"version-history":[{"count":1,"href":"https:\/\/tiagorcorreia.com\/en\/wp-json\/wp\/v2\/posts\/5219\/revisions"}],"predecessor-version":[{"id":5345,"href":"https:\/\/tiagorcorreia.com\/en\/wp-json\/wp\/v2\/posts\/5219\/revisions\/5345"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tiagorcorreia.com\/en\/wp-json\/wp\/v2\/media\/4844"}],"wp:attachment":[{"href":"https:\/\/tiagorcorreia.com\/en\/wp-json\/wp\/v2\/media?parent=5219"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tiagorcorreia.com\/en\/wp-json\/wp\/v2\/categories?post=5219"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tiagorcorreia.com\/en\/wp-json\/wp\/v2\/tags?post=5219"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}