Is it true renovation and construction works now have 6% VAT?
Yes — with conditions. Under DL 97/2026 (part of the "Construir Portugal" package), construction and renovation works (empreitadas) on housing can be invoiced at 6% VAT instead of 23% — a major saving on any serious renovation.
In force: the 6% rate is active — DL 97/2026 was published 20 May 2026 and applies from Q3 2026. It covers works whose licensing/procedural initiative falls between 25 Sep 2025 and 31 Dec 2029 (VAT due from 1 Jan 2026). Confirm your specific case with the Autoridade Tributária or your accountant.
⚠️ Clawback: ~10% IMT penalty if you change the property's use/residence status after claiming.
Practical notes: the contractor must apply the rate correctly on their invoices — agree it in writing in the quote. And if you're buying land or a ruin to build/renovate: do the PIP (Pedido de Informação Prévia) at the Câmara before buying, licensing takes months, and always get an itemised written budget. (Not applicable to flip-for-resale projects.)
Sources
Diário da República — DL 97/2026Frequently asked questions
Does the 6% VAT apply to buying a house, or just works?
How do I actually get the 6% rate?
What is the clawback risk?
Keep reading
How do I build or renovate a home in Portugal — licensing, the 6% VAT and the pitfalls? We renovated a house in Portugal — the honest version Buying land in Portugal: what to check before you payAnd in your actual case?
The article gives you the rule. What decides your case is the detail — the area, the price, the state of the paperwork. Tell me what you are looking for and I will tell you what to check first.
Guidance, not legal or tax advice — verify your case with official sources.