Government committed to 6% VAT on construction and refurbishment for affordable and social housing
The Portuguese government has again confirmed that it will slash VAT on the construction or refurbishment of properties for affordable housing to 6%.
The confirmation was made by Portugal’s Minister of Housing, Miguel Pinto Luz on Wednesday in parliament.
“I want to express, with complete clarity, that it is the intention of the Government to insist on reducing VAT to the minimum rate of 6% in housing rehabilitation and construction works, with limits depending on prices,” said the minister, who was heard by the Economy and Public Works Committee.
The measure was rejected in the State Budget for 2025 and the Government’s intention is to reintroduce it. “We are convinced that it is essential to boost the supply of housing at affordable prices,” explained Miguel Pinto Luz.
The Minister of Infrastructure also said that 16 requests for prior information on construction land earmarked for affordable public or rental housing, including 5,980 council homes, are ready.
According to the minister, the project is now only awaiting a report from the European Investment Bank to move forward.
Miguel Pinto Luz also said that an Emergency Housing Fund will be created, a proposal from the party Livre and approved under the State Budget for 2024.
“It will allow us to solve some pressing problems in the sector. I will certainly have more details to announce on my next visit to the parliament. For now, there is the guarantee that the legislative process, on this matter, is in the process of being finalised,” he said.
The representative from party Livre, Filipa Pinto, recalled that the fund would be for “emergency support for those who are deprived of housing for temporary accommodation, income support or purchase for people who have to leave their homes and in homeless situations”, and asked the minister what changes would be made by the Government.
Miguel Pinto Luz stated that the possibility of resorting to the fund in case of urgent rehabilitation works would be added. “We will add to what was presented,” he said, estimating that the annual income for the fund exceeds €100 million.
