The government is finalizing a draft law to reduce VAT on housing construction, lowering it from the standard rate of 23% to the reduced rate of 6%. This initiative follows the rejection by the opposition of a legislative authorization included in the 2025 State Budget (OE2025).
The proposed legislation aims to create conditions to increase the availability of homes targeted at the middle class, as explained by Cláudia Reis Duarte, Secretary of State for Fiscal Affairs, in an interview with Jornal de Negócios and Antena 1.
The previous attempt was blocked with votes against from the PS, PCP, BE, and Livre, abstentions from Chega and PAN, and votes in favor from PSD, CDS-PP, and IL. At the time, the opposition argued that the issue warranted a thorough debate in Parliament, rather than being addressed through a legislative authorization.
The new proposal is being designed to comply with EU regulations and ensure that the VAT reduction translates into lower final prices, directly benefiting the middle class.
As before, the measure is intended to cover construction and rehabilitation projects for residential properties, excluding those whose value exceeds limits deemed compatible with social housing policies. However, the specific criteria to define these limits remain under discussion.
in: Idealista
