VAT on Demolish and rebuild in an ARU in Portugal: 6%, 13% or 23%?
23% applies when a building is demolished and rebuilt, even inside an ARU, because verba 2.23 covers rehabilitation of an existing building and leaves out new buildings and rebuilding after demolition.
- Rate
- 23% (standard rate) on the mainland
- Reason
- Verba 2.23 needs rehabilitation of an existing building
- Excluded
- New buildings and reconstruction after demolition
- Allowed exception
- Rebuilding or enlarging where existing conditions make it impossible to meet the technical rules (Decreto-Lei n.º 95/2019, art. 3)
- Other routes
- Verba 2.42.1 may apply to new homes for sale or letting: see the new build pages
- Official text (Lista I of the Código do IVA)
- info.portaldasfinancas.gov.pt/pt/informacao_fiscal/codigo...
- Sources
- info.portaldasfinancas.gov.pt/pt/informacao_fiscal/codigo...
info.portaldasfinancas.gov.pt/pt/informacao_fiscal/inform... - Checked
- 2026-11-05
What decides the rate
- The tax authority reads rehabilitation as work on an existing building that gives it adequate performance and safety.
Important
- This page is a general summary of public sources and not tax advice.
- Rates shown are for mainland Portugal. The rate depends on the facts of each job, so ask a certified accountant (contabilista certificado) or the Tax Authority (AT) before you invoice or pay.
More: VAT guide
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