The Government wants to lower VAT on construction and rehabilitation for housing, but with limits depending on the value of the properties. The measure should advance until the end of the legislature, but, for now, there is no set date, in addition to the fact that it will have to pass the scrutiny of Parliament.
Housing rehabilitation and construction works must always have VAT at a reduced rate of 6%, but “with limits depending on prices”. The measure is included in the New Housing Strategy, presented this Friday by the Prime Minister and the Minister of Infrastructure and Housing. The idea is that it will be implemented by the end of the legislature.
The reduction of VAT in construction was one of the proposals of the Government Program, which promised the creation of an “Exceptional and temporary Regime for the elimination or Reduction of Tax Costs in construction or rehabilitation works in properties intended for permanent housing, regardless of location in areas of Urban Rehabilitation (ARU)”.
One of the measures envisaged there was, precisely, the reduction of VAT to 6% on construction and rehabilitation works and services, as well as the “extension of deductibility”.
The measure, explained Miguel Pinto Luz, is still “being modeled”, because, the minister highlighted, “we want to be fair and that this gain in VAT is reflected, in fact, in lower prices for those who buy”.
Currently, it should be noted, VAT is 6% for construction or rehabilitation for housing at controlled costs or for affordable rental. In ARUs, VAT is also 6%, but since October last year, with Mais Habitação, it became only for rehabilitation works (until then it also covered construction from scratch).
A change to the rules currently in force, it should be noted, will always have to go through Parliament, since issues related to taxes fall within the competence of the Assembly of the Republic.
