Govt. insists on lowering VAT on housing to 6%

The government is going to insist on reducing VAT to the minimum rate of 6% for housing rehabilitation and construction works, the infrastructure minister, Miguel Pinto Luz, said on Wednesday.

During a hearing in the Economy Committee, the minister stated “quite clearly” that the government intends to “insist on reducing VAT”, a measure it had already presented in the 2025 State Budget, but which was rejected. “It’s a challenge, a call to all parties, since the government didn’t win its request for legislative authorisation in this year’s budget“, he said.

He said that “one of the government’s most complex challenges” is related to the housing sector, “a structural problem that is awaiting urgent answers” and that will go beyond “intervention during a parliamentary term”.

He emphasised that the creation of a Housing Emergency Fund, which “will make it possible to solve some pressing problems in the sector”, is in “legislative development”.

16 requests for prior information on land for construction under the “build to rent” system, with affordable rents or prices, are ready. “This covers 5,980 public housing units. We’re just waiting for the report from the EIB (European Investment Bank) for this project to materialise“, he added.