New housing measures.

Decree-Law No. 97/2026 introduces a set of tax measures designed to boost the housing supply in Portugal through incentives for construction, renovation and the rental market. 

The new tax framework includes changes designed to promote investment in the housing sector, increase the availability of properties for rent and create more favourable conditions for both landlords and tenants.

Key measures include the application of a reduced VAT rate on the construction and renovation of housing, new tax benefits associated with renting, and incentives designed to promote the availability of properties at more affordable prices.

Below is a summary of the main changes set out in the legislation:

• The construction and renovation of housing will now benefit from a reduced VAT rate of 6%.
• Landlords charging moderate rents will now benefit from a 10% personal income tax rate.
• Reinvestment in properties intended for letting may qualify for personal income tax exemption.
• Tax benefits for owners who make properties available at affordable rents are being strengthened.
• The amount of rent that can be deducted for personal income tax purposes is being increased.