Porta da Frente Christie’s International Real Estate - 22/07/2026, 10:51:21
Licensing window and 2032 cut off | Porta da Frente Christie’s International Real Estate
6% VAT deadlines: the licensing window and the 2032 cut off
The 6% VAT on housing construction is not permanent and does not apply to every
project. A handful of dates decides almost everything. Getting one of them wrong costs 17 percentage points of VAT.
project. A handful of dates decides almost everything. Getting one of them wrong costs 17 percentage points of VAT.
The dates that matter
Date | What it means |
|---|---|
25 September 2025 | Opens the window. The procedural initiative for the urban development operation must begin on this date or later.[1] |
1 January 2026 | The tax must become chargeable from this date. By joint option of the supplier and the acquirer, item 2.42.1 may apply from here.[1] |
1 July 2026 | Entry into effect as a general rule, corresponding to the quarter following the decree's entry into force.[1][2] |
1 September 2026 | The CIA regime, to which item 2.42.2 refers, and the new affordable letting regime take effect.[1] |
31 December 2029 | Closes the window. Operations whose procedural initiative begins after this date are not eligible.[1] |
31 December 2032 | 31 December 2032 |
The window and what counts as the procedural initiative
Item 2.42.1 and its regime apply to construction contracts relating to urban development operations whose procedural initiative begins from 25 September 2025 to 31 December 2029, and where the tax becomes chargeable from 1 January 2026.[1] There are two requirements, not one.
The decree itself defines the procedural initiative.[1]
- For works subject to licensing, the submission of the licensing application.
- For works subject to prior notification, the submission of the prior notification.
- For works exempt from prior control, the submission of the prior opinion under article
7(2) of the Legal Regime for Urban Development and Building, or, in the remaining cases, the submission of the notice of commencement of works.[3]
Keep proof of the submission date. It is that document, and not the date of the construction contract or the date of the permit, that fixes eligibility.[1]
The option to backdate to 1 January 2026
This point goes unnoticed. By joint option of the supplier and the acquirer, the amendment to article 2(1)(j) of the VAT Code, item 2.42.1 and the regime of articles 10 and 11 apply from 1 January 2026.[1] In other words, works invoiced in the first half of 2026 may, by agreement between the parties, be covered. It is worth reviewing the invoicing for that period with your chartered accountant. Note: this backdating option does not cover the refund regime of annex ii.
The 2032 cut off
Item 2.42.1 ceases to be in force on 31 December 2032.[1] This is the least discussed risk in the regime. A project whose procedural initiative takes place in December 2029, at
the edge of the window, will have about three years to invoice the entire construction contract at the reduced rate. In a mid sized residential development, with licensing, contracting, construction and inspections, three years is not a comfortable margin.
the edge of the window, will have about three years to invoice the entire construction contract at the reduced rate. In a mid sized residential development, with licensing, contracting, construction and inspections, three years is not a comfortable margin.
In addition, there is the 24 month deadline between the habitation or use documentation and the sale, or the entry into force of the first lease.[1] The commercial calendar is part of the conditions of the benefit, not merely a market question.
The dates of the self-build refund regime
Annex ii of the diploma, which lets the private individual claim the partial VAT refund on building their own house, has its own calendar. It takes effect on 1 July 2026 and applies to urban operations whose procedural initiative takes place from 25 September 2025 to 31 December 2029, with the tax becoming chargeable from 1 January 2026.[1] The claim is made within 12 months of the start-of-use documentation. There is a transitional rule: claims relating to the first three quarters of 2026 may only be submitted from 1 October 2026, with the 12 months counted from that date.[1] See the page on works on your own home.
Recommended timeline
- Confirm and document the date of the procedural initiative.
- Check whether there is invoicing from the first half of 2026 that justifies the joint option to backdate.
- Model the construction contract's invoicing plan with the expected issue date of each interim payment certificate.
- Identify the construction contract value expected to be invoiced after 31 December 2032.
- Cross check the works schedule against the 24 month deadline for the sale or the first lease.
- Review the plan whenever there is a works delay of more than one quarter.
Frequently asked questions
I obtained my licence in June 2025. Do I benefit?
No. The window opens on 25 September 2025.[1]
Which date counts: the licence application or the permit?
The date of the procedural initiative, that is, the submission of the licensing application or the prior notification.[1]
I issued invoices in March 2026 on an eligible project. Have I lost the benefit?
Not necessarily. By joint option of the supplier and the acquirer, the item may apply from 1 January 2026.[1] Consult your chartered accountant.
The works finish in 2033. Do I lose everything?
You lose the reduced rate from the moment the item ceases to be in force, on 31 December 2032.[1]
Can the 2032 deadline be extended?
As at the date of this page, no extension has been approved. Follow the Diário da República and the instructions of the Tax Authority.[4][5]
Call to action
Porta da Frente Christie’s International Real Estate works with developers and landowners on the
positioning, commercial planning and sale of residential developments. If you
are assessing a project in light of the new regime, talk to us.
positioning, commercial planning and sale of residential developments. If you
are assessing a project in light of the new regime, talk to us.
Sources
All sources were verified on the date shown at the top of this page.
[1] Decree-Law 97/2026, full text (PDF, Diário da República, series I no. 97). https://files.diariodarepublica.pt/1s/2026/05/09700/0001400040.pdf
[2] Portuguese Order of Certified Accountants, technical summary of the Housing Package (PDF). https://www.occ.pt/sites/default/files/public/2026-05/HABITACAO_22maioa.pdf
[3] Portuguese Urbanisation and Building Legal Regime (RJUE), Decree-Law 555/99 of 16
December. https://diariodarepublica.pt/dr/legislacao-consolidada/decreto-lei/1999-34448575
December. https://diariodarepublica.pt/dr/legislacao-consolidada/decreto-lei/1999-34448575
[4] Decree-Law 97/2026 of 20 May (Diário da República, Portuguese official gazette). https://diariodarepublica.pt/dr/detalhe/decreto-lei/97-2026-1124493227
[5] Portuguese Parliament, Bill 47/XVII/1 (procedure and votes). https://www.parlamento.pt/ActividadeParlamentar/Paginas/DetalheIniciativa.aspx?BID=315797
This content is informational and does not constitute tax or legal advice. The legislation
referred to may change. Always confirm your specific situation with a certified accountant or lawyer. Porta da Frente Christie’s International Real Estate.
referred to may change. Always confirm your specific situation with a certified accountant or lawyer. Porta da Frente Christie’s International Real Estate.
