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Mais Habitação programme



The Government announced yesterday, 16 February, a set of measures to address the current housing crisis ("Mais Habitação"), which will be subject to public discussion until 16 March.

The “Mais Habitação Programme contains a set of tax measures that will significantly impact on businesses and individuals. Although at this stage the exact details and impacts of the measures are still unknown, it should be noted that they may have a significant impact on ongoing investment decisions.

Housing Rental Incentives

Tax exemption: Renting of properties for residential purposes

The owners of properties used for local accommodation who rent such properties for residential purposes until the end of 2024 may benefit from a personal income tax exemption on the rents until 2030. Should they choose not to rent the properties for housing purposes, they may be subject to an extraordinary tax contribution (see below).


Extraordinary tax contribution: Short-Term Rental

If the properties are not rented for housing purposes by the end of 2024, owners operating local accommodation activities may be subject to an extraordinary tax contribution levied on the income generated by such activity. The applicable rate and the taxable income are yet to be defined, but it is anticipated that the same will be variable, considering such factors as business, location and size of the property.


Tax exemption: Capital Gains on Sales to Government

Capital gains earned by owners who sell their properties to the Government may be exempt from taxation.


Tax exemption: Affordable housing

The acquisition of properties to be rented as affordable rent may be exempt from the Municipal Property Tax (IMT). The rent paid under affordable hounsing programmes will also benefit from a similar Personal Income Tax (IRS) exemption.


Tax reduction: VAT on Refurbishment

The execution of refurbishment works on properties assigned to affordable housing programmes may benefit from a reduced VAT rate.


Tax reduction: Taxation on Rent

The Personal Income Tax rate applicable to rent will be reduced from 28% to 25%. Furthermore, the current reduced rates depending on the duration of the rental period shall also be reduced: for contracts with a duration ranging from 5 to 10 years, a rate of 15% shall apply (instead of the current 23% rate), from 10 to 20 years, a rate of 10% shall apply (instead of the current 14% rate) and for contracts with a duration of more than 20 years, a rate of 5% shall apply (instead of the current 10% rate).


Other measures

Tax exemption: Capital Gains on Loan Repayment

Capital gains earned by homeowners and applied in the repayment of their own or their descendants' mortgages may be exempt from taxation.

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