Buying a home with 6% VAT: what buyers need to know | Porta da Frente Christie’s International Real Estate

If you are buying a new home in Portugal, the first thing to understand about the 6% VAT is that this rate does not fall on your purchase. It falls on the works the developer contracted. The second is that, even so, the regime creates obligations for you.

The transmission of immovable property is exempt from VAT under Article 9(30) of the VAT Code.[1] When you buy a home from a developer you do not pay VAT on the price. You pay IMT and Stamp Duty. Decree-Law no. 97/2026 reduced from 23% to 6% the VAT that the developer bears on the construction contract, under the conditions of item
2.42.1.[2][3]

For the construction contract to benefit from the reduced rate in the sale modality, Article 10 of the diploma requires, cumulatively, that the property be sold to you for your own permanent residence, that on the acquisition the IMT rates of Article 17(1)(a) or (b) of the IMT Code apply, that the sale take place within 24 months from the start-of-use documentation, and that the title deed expressly mention the application of item 2.42.1.[3][4]

This is the point many buyers are unaware of. Allocating the property to own permanent residence is not a condition for applying the reduced rate to the developer. Its absence does not oblige the developer to regularise the VAT. It falls, rather, on the buyer.[3][5]

Put simply: you have six months to live there, and you have to keep living there during the following 12 months. The surcharge falls on the taxable value of the property for IMT purposes, which is the greater of the price and the taxable asset value.[8]

If you are under 35 and buying your first own permanent residence, check the IMT and Stamp Duty exemption of Decree-Law no. 48-A/2024.[12] Confirm with a certified accountant how that exemption interacts with the requirement, in item 2.42.1, that the rates of Article 17 of the IMT Code apply.[3]

The same diploma amended Article 17 of the IMT Code. An IMT rate of 7.5% now applies to the acquisition of an urban building, or autonomous unit, destined exclusively for housing, whenever the acquirer is a non-resident, with no exemption or reduction applying.[3][13] There are exceptions: if the acquirer is already considered a tax resident in Portugal, if they become resident within two years of the acquisition, or if the property is destined for residential letting within the rent limits.[3] It is not a surcharge added to the standard rates. It is a flat rate that replaces them.

1. Did the procedural initiative of the urban operation take place from 25 September 2025 to 31 December 2029?[3]

2. Is the price of this unit, including garage, storage and extras, below the limit in force?[3]

3. Will the title deed expressly mention the application of item 2.42.1?[3]

4. Does the sale take place within the 24 months from the start-of-use documentation?[3]

5. What commitments do I take on regarding the use of the property, and for how long?[3][5]

If you bought off-plan and are considering assigning your position in the promissory contract before the deed, be aware that this assignment can trigger IMT at that moment, under Article 2(3) of the IMT Code, an understanding confirmed in an arbitration ruling of the CAAD.[8][14][15][16] The assignment also has its own treatment for VAT purposes.[17][18] It may further generate taxable capital gains for IRS purposes.[7]

No. The purchase of a home is exempt from VAT.[1] The 6% falls on the construction contract entered into by the developer.

If you do not allocate the property to own permanent residence within six months, or cease to do so in the following 12 months, a 10% IMT surcharge is applied on the taxable value of the property, save in exceptional circumstances.[3][6]

No. The allocation to own permanent residence by the acquirer is not part of the conditions for applying the reduced rate. The consequence falls on the buyer, in the form of an IMT surcharge.[3][5]

No. The price limit in 2026 is €660,982, counting the ancillary parts and the services that enhance the property, even if the object of separate contracts.[3]

No. The law reduces the VAT cost on the construction contract. The formation of the sale price is free.

[1] Portuguese VAT Code, article 9 (exemption on property transfers) and annexed List I. https://info.portaldasfinancas.gov.pt/pt/informacao_fiscal/codigos_tributarios/civa_rep/Pages/iva9.aspx

[2] Decree-Law 97/2026 of 20 May (Diário da República, Portuguese official gazette). https://diariodarepublica.pt/dr/detalhe/decreto-lei/97-2026-1124493227

[3] Decree-Law 97/2026, full text (PDF, Diário da República, series I no. 97). https://files.diariodarepublica.pt/1s/2026/05/09700/0001400040.pdf

[4] Portuguese Urbanisation and Building Legal Regime (RJUE), Decree-Law 555/99 of 16
December. https://diariodarepublica.pt/dr/legislacao-consolidada/decreto-lei/1999-34448575

[5] Jornal de Negócios,
compliance responsibility shifts to the buyer. https://www.jornaldenegocios.pt/economia/habitacao/detalhe/iva-a-6-na-construcao-responsabilidade-em-cumprir-as-regras-passa-para-quem-compra-a-casa

[6] ECO, 10% penalty for buyers who benefit from the 6% rate and change residence (20 May 2026). https://eco.sapo.pt/2026/05/20/quem-comprar-casa-com-iva-a-6-e-mudar-de-residencia-tem-penalizacao-de-10-em-imt/

[7] Portuguese Personal Income Tax Code (CIRS), articles 10 and 43 (capital gains). https://info.portaldasfinancas.gov.pt/pt/informacao_fiscal/codigos_tributarios/cirs_rep/Pages/irs10.aspx

[8] Portuguese Property Transfer Tax Code (CIMT), articles 2, 4, 12 and 17. https://info.portaldasfinancas.gov.pt/pt/informacao_fiscal/codigos_tributarios/cimt/Pages/cimt2.aspx

[9] Tax Authority Circular 40129/2026 of 6 January (2026 IMT rate tables). https://at.madeira.gov.pt/ficheiros/Oficio_circulado_40129_2026.pdf

[10] PwC, 2026 Tax Guide (IMT, IMI and AIMI). https://www.pwc.pt/pt/pwcinforfisco/guia-fiscal/2026/imt.html

[11] Portuguese Stamp Duty General Table, items 1.1 and 17.1. https://info.portaldasfinancas.gov.pt/pt/informacao_fiscal/codigos_tributarios/selo/Pages/ccod-selo-tabgiselo.aspx

[12] Decree-Law 48-A/2024 (IMT and Stamp Duty exemption for young buyers). https://www.pgdlisboa.pt/leis/lei_mostra_articulado.php?nid=3814&tabela=leis&so_miolo=

[13] 7.5% IMT surcharge for non-residents, regime and exceptions. https://imtcalc.pt/pt/nao-residentes

[14] CAAD arbitration ruling P540/2024-T (broad application of CIMT article 2(3)). https://caad.org.pt/tributario/decisoes/view.php?l=MjAyNTAxMjcxMjA4MDMwLlA1NDBfMjAyNC1UIC0gMjAyNC0xMi0wOSAtIEpVUklTUFJVREVOQ0lBLnBkZg==

[15] Idealista and Andersen, assignment of a promissory contract can trigger IMT before the deed (2 July 2026). https://www.idealista.pt/news/imobiliario/habitacao/2026/07/02/76265-cedencia-contratual-pode-levar-ao-pagamento-de-imt-antes-da-escritura

[16] Gómez-Acebo & Pombo, IMT on the assignment of promissory contracts (September 2025). https://ga-p.com/wp-content/uploads/2025/09/Impuesto_transmisiones_patrimoniales_pt.pdf

[17] Portuguese Order of Certified Accountants, VAT on assignment of contractual position. https://www.occ.pt/pt-pt/noticias/iva-cedencia-da-posicao-contratual-0

[18] Tax Authority binding rulings IVE 12151, IVE 13145 and IVE 1658 (assignment of contractual position).
http://taxfile.pt/file_bank/news5217_30_1.pdf