2026 Housing Package: Discover the 10 Key Tax and Accounting Changes
Publication Date: 01/08/2026
Measures, deadlines and new VAT rules
Technical analysis with an accounting focus and special eligibility requirements.
The new rules approved on 1 July 2026 introduce significant changes to the construction, rehabilitation and rental of properties, establishing limits, eligibility conditions and specific deadlines for accessing tax benefits.
1 - New “moderate value” limits
The new rules apply to construction, rehabilitation and rental, subject to compliance with the following limits:
Moderate rent
Maximum monthly limit of €2,300, corresponding to 2.5 times the Guaranteed Minimum Monthly Remuneration.
Sale price
Up to the upper limit of the 2nd bracket of Article 17 of the IMT Code (€660,982 in 2026)." (This amount will always depend on the limit of the 2nd bracket approved in the State Budget)
Contractual periods
CIA contracts may have a duration of up to 25 years. Under the RSAA scheme, the contract must have a minimum duration of three years.
Strategic objective
To alleviate the tax burden on construction and promote affordable rental through IRS and IRC exemptions and the application of the reduced VAT rate, while safeguarding the stability of the housing market.
2 - VAT at 6%: eligibility requirements
To benefit from the reduced VAT rate, the following conditions must be met:
Mandatory purpose
The property must be intended exclusively for Owner-Occupied Permanent Residence — HPP — or moderate rental.
Sale or commercialisation
The sale or first rental must take place within 24 months following the issue of the occupancy permit.
Residential permanence
The property must be rented or used as an HPP for at least 36 months during the first five years following completion of the works.
Attention: failure to comply with any of these conditions requires the reinstatement of the 23% rate, plus compensatory interest.
3 - VAT: reverse charge and issuer qualification
The application of the reverse-charge rule, under the General Regime and Item 2.42, requires new technical precautions and compliance with licensing requirements.
Issuer qualification
The service provider must hold a valid licence or a construction certificate validated by IMPIC.
Invoicing without VAT
The qualified provider issues the invoice with the express wording “VAT — Reverse Charge”.
Purchaser’s responsibility
The purchaser is responsible for calculating and paying the tax at the applicable rate of 6% or 23%, even where the purchaser is an exempt entity.
Technical risk of non-compliance
The contractor’s failure to hold valid IMPIC licensing disqualifies the transaction.
This prevents the transaction from qualifying for the reduced rate and requires the transaction to be corrected to the standard 23% rate, with retroactive effect.
4 - VAT: partial refund for Owner-Occupied Permanent Residence
Individuals
This scheme applies to individuals who construct their own home outside the scope of a business activity.
Calculation of the amount
The refund corresponds to the difference between the 23% rate and the 6% rate, namely 17% of the VAT borne on construction contracts reported through e-Fatura.
Application deadline
The refund request must be submitted through the Tax Authority Portal within 12 months following the issue of the occupancy permit.
5 - IRS: Category G capital gains
New taxation exclusion in the housing market
The new taxation exclusion applies in the following circumstances:
Sale of a residential property, whether an Owner-Occupied Permanent Residence or a secondary residence;
Reinvestment made within a maximum period of 36 months following the sale;
Use of the amount to purchase a property intended for the traditional rental market, at a moderate rent, for at least 36 months.
6 - IRS and IRC: rental incentives
Individual landlords
For contracts with moderate-value rents, the autonomous IRS rate is reduced to 10%.
The withholding tax rate applicable to entities with organised accounting is also set at 10%.
Taxpayers with organised accounting
Under IRC or Category B of IRS, a 50% taxation exclusion is provided for net property income obtained during the financial year.
To benefit from this exclusion, the property must be duly allocated to and registered as part of the business activity carried out by the taxpayer.
7 - Progressive benefits for tenants
The tax credit relating to rental expenses is progressively increased:
Year 2026
The deduction limit increases to €900.
From 2027 onwards
The deduction limit is set at €1,000.
Mortgage interest is not eligible for this deduction.
8 - IMT: Controlled-Cost Housing
Properties up to €330,539
The purchase of the first Owner-Occupied Permanent Residence is fully exempt from IMT.
Regarding Stamp Duty, a tax credit is permitted up to the limit of the respective bracket.
Properties valued above €330,539
The progressive rates provided for under the IMT Jovem scheme apply.
For Stamp Duty, a professional deduction calculated by brackets is applied.
Technical note on expiry: the benefit is reversed if the purpose of the property is changed within six years or if the property is not allocated to an Owner-Occupied Permanent Residence within the six months following completion of the deed.
9 - IMT: increase for non-residents
Fixed rate of 7.5%
As a rule, this applies to purchases of urban residential properties made by individuals who are not tax residents.
Refund mechanism
The purchaser may request a refund of the tax difference if they become a Portuguese tax resident within a maximum period of two years.
Safeguard through rental
The standard IMT rate applies when the property is allocated to the moderate rental market within six months.
10 - CIA ( investment contract for rental)
&
RSAA ( Simplified Affordable Rental Scheme.) :
New investment instruments
CIA contracts
CIA investment contracts may have a duration of up to 25 years.
These contracts provide IMI and IMT exemptions, as well as the application of the reduced VAT rate to construction.
RSAA scheme
The RSAA scheme replaces the former Affordable Rental Programme.
A minimum period of three years is required for permanent contracts or three months for temporary rental contracts.
IRS and IRC exemption
Income obtained under the RSAA is exempt from IRS and IRC, provided that landlords electronically report the contracts to the IHRU by 15 January of each year.
IMPORTANT NOTE : Retroactive Application of the New VAT Regime
How to recover VAT borne in the housing sector between January and June 2026
The new VAT regime applicable to the construction and rehabilitation of residential properties takes operational effect from 1 July 2026.
However, the regime provides for the possibility of retroactively recovering the tax relating to certain invoices issued from 1 January 2026 onwards, provided that the applicable legal and procedural requirements are met.
Essential dates
The regime enters fully into force on 1 July 2026 and will apply to current transactions that meet the conditions established by law.The retroactive application allows invoices for which VAT became chargeable from 1 January 2026 onwards to be considered.
However, only construction contracts whose procedural initiative took place between 25 September 2025 and 31 December 2029 are eligible.
The date of the procedural initiative is considered to be:
The submission of the licensing application;
The submission of the prior notification;
The notification of commencement of the works.
Processes initiated before 25 September 2025 cannot benefit from this regime.
Recovery of VAT from the first half of 2026
Where the urban planning process was formally initiated after 25 September 2025, invoices for which VAT became chargeable from 1 January 2026 onwards may be considered.
This possibility covers invoices issued during January, February, March, April, May and June 2026.
How will the adjustment be made?
For companies and property developers, recovery may be carried out by correcting the invoices to apply the 6% VAT rate and exercising the joint option provided for in the legislation. This procedure may be carried out from July 2026 onwards.
In the case of individuals under a self-construction arrangement, recovery must be carried out through a refund request submitted to the Tax Authority, expectedly from October 2026 onwards.
For construction contracts carried out between companies, the correction documents provided for by law must be issued between July and December 2026.
Practical example
Consider a construction project whose licensing application was submitted on 15 October 2025 and whose works began in January 2026.
During the first half of 2026, the following invoices were issued:
January: 40,000 euros;
March: 60,000 euros;
June: 50,000 euros.
Since the urban planning process began after 25 September 2025 and the VAT on the invoices became chargeable after 1 January 2026, the VAT difference relating to the three invoices may be recovered retroactively.
The two essential conditions
To benefit from the retroactive application of the reduced VAT rate, two conditions must be met simultaneously:
The urban planning process must have been formally initiated between 25 September 2025 and 31 December 2029.
The VAT on the respective invoices must have become chargeable from 1 January 2026 onwards.
When both requirements are met, the reduced VAT rate may be applied to expenses incurred before the regime became operational in July 2026.
// Practical implications: duties and responsibilities of the accountant
Technical and reporting compliance
The service provider’s licence must be checked on the IMPIC portal before recording invoices under the reverse-charge regime.
Duty to provide written information
The accountant must formally inform the client of the applicable deadlines and the expiry risks associated with the reduced VAT rate of 6%.
Monitoring critical deadlines
Monitoring of the 24-month post-construction period.