The President of the Republic, António José Seguro, has promulgated the government decree introducing a series of tax relief measures in the housing sector. The decision was announced on Tuesday, May 12.
The statement published on the Presidency of the Republic’s website reads: “The President of the Republic has enacted the government decree which, pursuant to the authorization granted by Law No. 9-A/2026 of March 6, approves tax relief measures to promote the supply of housing.”
A home sale price of up to 660,982 euros is considered “moderate”
The new legislative package introduces tax relief measures in the housing sector, based on the concept of a “moderate price” established by the government. Thus, when the law takes effect, a home sale price of up to 660,982 euros will be considered “moderate.”
However, this amount may be updated annually and will be determined based on the brackets of the municipal tax on onerous transfers (IMT).
This adjustment had already taken place before the law came into effect. When the government first presented the measures last year, the “moderate” sale price would, according to the proposal, have a maximum value of approximately 648,000 euros. With the update of the IMT tables in 2026, that maximum value exceeded 660,000 euros.
Moderate rent will be capped at 2,300 euros per month
With regard to rent, a “moderate” amount is defined as one that does not exceed 2.5 times the national minimum wage in 2026, which is 920 euros.
Thus, “moderate” rent will be capped at 2,300 euros per month; however, this limit may also be adjusted “by decree of the government members responsible for finance and housing, in accordance with the adjustment coefficient provided for (...) in the New Urban Lease Regime (NRAU).”
It is therefore on the basis of this concept that tax breaks will be granted to homeowners who set prices that do not exceed these limits.
Among the measures is a reduction in construction VAT to a rate of 6% for residential construction projects sold for a maximum price of 660,000 euros or rented for up to 2,300 euros, as well as a reduction in personal income tax to a rate of 10% on rental income up to 2,300 euros.
This change is part of a package of tax relief measures aimed primarily at homeowners (which was announced in September of last year). The bill was subsequently submitted to Parliament in December in the form of a request for legislative authorization and was approved in February of this year.
The legislative authorization was subsequently promulgated by Marcelo Rebelo de Sousa and published in the Official Gazette in March; however, the decree-law stemming from it and regulating the measures has yet to be published, and thus these tax relief measures have not yet entered into force.
The promulgation of this decree, now announced by the President of the Republic, is one of the final steps before the measures take effect. The legislation still needs to be published in the Official Gazette.
Image credits: © James Sullivan | Unsplash
