Buying a home with 6% VAT: what changes for buyers
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.
You do not pay VAT on the purchase of the home
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]
What the law requires of you
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]
Check the mention of item 2.42.1 in the deed. It is an express legal condition, and it is the document that later proves the framework.[3]
The 10% IMT surcharge
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]
Under Article 10(5) of Decree-Law no. 97/2026, if the property is not allocated to own permanent residence within six months of the acquisition, evidenced by the tax domicile, or if it ceases to be destined exclusively for own permanent residence in the 12 months following the allocation, an IMT
surcharge equal to 10% is applied on the taxable value determined under Article 12 of the IMT Code.[3][6] There is an exception where the non-allocation results from exceptional circumstances,
under Article 10(26) of the IRS Code.[3][7]
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]
