Law no. 9-A/2026: New Tax Incentives for the Housing Sector

Law no. 9-A/2026, of 6 March, authorises the Portuguese Government to approve, within 180 days, a set of tax relief measures aimed at increasing housing supply. These measures are intended to encourage construction, rehabilitation and the development of affordable rental housing.

Among the proposed measures is the application of a reduced VAT rate of 6% to the construction and rehabilitation of residential properties that meet certain criteria. The law also предусматривает a reduction of personal income tax (IRS) to 10% on income derived from residential leases.

In addition, the framework includes the introduction of tax incentives for investment in rental housing, covering several taxes such as transfer tax, stamp duty, municipal property tax and additional municipal property tax. It also provides for the possibility of exemption from capital gains tax where the proceeds are reinvested in housing intended for affordable rental purposes.

Further measures include an increase in rent deductions for tenants for IRS purposes, as well as tax incentives for real estate investment vehicles focused on rental housing and their investors.

The law also provides for the application of a 7.5% real estate transfer tax (IMT) on the acquisition, by non-residents, of urban property or autonomous units intended for residential use. Finally, it introduces the creation of a partial VAT refund regime applicable to the construction of primary residences.

Overall, these measures aim to support housing supply by encouraging investment in construction and rental housing.