VAT on Rehabilitating a building to sell flats in Portugal: 6%, 13% or 23%?
6% can apply to the rehabilitation contract for a whole building whose flats will be sold as buyers' main homes (verba 2.42.1), even if the buyers are not yet known. Each sale must meet the value and deed conditions.
- Rate
- 6% on the rehabilitation contract
- Legal basis
- Verba 2.42.1, Lista I, added by Decreto-Lei n.º 97/2026 of 20 May
- Buyers
- Need not be identified when the works are done
- Deed
- Must record main-home use, the reduced IMT rates, the verba 2.42.1 reference and the sale value
- Documents to keep
- The use document and the title deeds
- Sale value cap
- EUR 660,982 per home (AT ruling 30817)
- 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...
info.portaldasfinancas.gov.pt/pt/informacao_fiscal/inform... - Checked
- 2026-11-05
What decides the rate
- The contractor invoices without VAT and marks the invoice with 'IVA - Autoliquidação' when the reverse-charge rule applies. The developer then charges itself 6%.
- The works must meet the planning window of 25 September 2025 to 31 December 2029.
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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