Inês Dias Cardoso, a principal associate in the tax team, analyses Portugal’s new housing tax package in an article published in the International Tax Review, highlighting the key measures set out in Law no. 9-A/2026 of March 6.
New tax framework for housing in Portugal
Law no. 9-A/2026 authorises the government to implement a set of tax measures aimed at increasing housing supply, particularly in owner-occupied housing and moderate rent leasing.
The law establishes the framework for these measures, with an implementing decree-law expected by the end of August.
Moderate rent and price thresholds
The regime introduces specific thresholds for access to the tax benefits.
For 2026, “moderate rent” is defined as a monthly rent of up to €2,300, while “moderate price” corresponds to a property acquisition value of up to €660,982.
Key tax measures
The article highlights several measures included in the package:
- Capital gains tax exemption for individuals on the sale of property, provided the proceeds are reinvested in housing intended for moderate rent leasing;
- Reduced VAT rate of 6% on construction and refurbishment works for housing intended for sale as owner-occupied housing or for moderate rent leasing;
- 10% personal income tax rate on rental income earned by individual landlords under moderate rent schemes;
- 50% exclusion of taxable rental income for professional landlords;
- Tax incentives for real estate investment vehicles;
- Increased IMT rates for certain non-resident investors, unless the property is allocated to moderate rent leasing.
The article also refers to the possible introduction of lease investment contracts and a Simplified Affordable Rental Regime.
VAT reduction as a central measure
Among the various measures, the reduction of VAT on construction is identified as one of the most significant elements of the package.
Effectiveness dependent on implementation
The analysis notes that the practical impact of the regime will depend on the implementing decree-law and subsequent regulation, which will determine how the measures are applied in practice.
Read the full article in the International Tax Review.
