VAT on Social housing built by a municipality in Portugal: 6%, 13% or 23%?
6% applies when a municipality or other local authority orders building works directly from a contractor, including housing (verba 2.19). A parish council is covered too.
- Rate
- 6% on the works contract
- Legal basis
- Verba 2.19, Lista I, Código do IVA (CIVA)
- Client
- Local authorities, municipal rehabilitation companies wholly held by public bodies, associations of municipalities, public companies for the secondary school network, and fire associations
- Contract
- Must be placed directly with the contractor
- Case
- Earthworks and a stone wall ordered by a parish council qualified
- 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 contract must be agreed directly between the local authority and the contractor.
- The contractor must be legally qualified to carry out construction work.
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
Free check
Tell us what work you plan and where. We will answer your VAT question by email, for free, using the official sources. This is general information, not tax advice.