Portugal Housing Package 2026

On December 2, 2025, the Portuguese government presented a comprehensive package of measures called "choque fiscal" (tax shock), aimed at addressing the country's housing crisis. The package includes changes to taxation on property purchases, rental income, and housing construction.

The housing crisis in Portugal has intensified in recent years: property prices have risen by more than 50% since 2015, and the average cost per square meter in Lisbon has exceeded €4,500. Young Portuguese people are increasingly unable to afford their first home, and the rental market is experiencing an acute shortage of supply.

The government presented the package as a comprehensive solution affecting all market participants: first-time buyers, young families, landlords, tenants, developers, and foreign investors. Key measures include:

• Updated IMT thresholds — full tax exemption for first home purchases up to €106,346
• Expanded IMT Jovem — increased limits for young buyers under 35
• Fixed rate for non-residents — single 7.5% IMT without progression
• Reduced rental tax — from 25% to 10% for moderate rents
• Preferential VAT on construction — from 23% to 6% for affordable housing

In this material, we analyze each measure of the package in detail, conditions for its application, practical calculation examples, and the next steps in the legislative process.

On January 9, 2026, the Assembleia da República (Portuguese Parliament) approved the government's housing package in the first reading (na generalidade). The vote became possible thanks to the abstention of the Chega party, which did not support the bill but did not block it either.

"O plano de habitação do Governo foi aprovado esta sexta-feira na generalidade pelo Parlamento, graças à abstenção do Chega."

The ruling coalition PSD/CDS-PP received support from the liberal party IL. Left-wing parties (PS, PCP, BE, Livre) voted against, criticizing the package for insufficient attention to social housing and excessive benefits for investors. At the same time, an initiative to simplify construction licensing was approved, which also received abstention from PS and Chega.

Imposto Municipal sobre as Transmissões Onerosas de Imóveis (IMT) is a property transfer tax paid by the buyer when completing a transaction. From 2026, two parallel exemption regimes are in effect: general (for all first-time home buyers) and special (for young people under 35).

The main impact of updating the brackets is that there is now full IMT exemption for the purchase of own and permanent housing up to €106,346. This is a significant increase from the previous threshold of €101,917, providing additional savings for buyers.

IMT Rate Scale for All Buyers (habitação própria e permanente)

The IMT Jovem regime (Isenção de IMT para Jovens) is a special tax benefit program for young first-time home buyers. The program was introduced in August 2024 and significantly expanded in 2026 with increased exemption limits.

Unlike the general regime, IMT Jovem provides exemption not only from IMT but also from Imposto do Selo (stamp duty), which provides an additional saving of about 0.8% of the property value.

IMT Jovem Exemption Limits

IMT Jovem Eligibility Conditions

"No caso em que apenas uma das pessoas cumpra as condições da lei, a isenção aplica-se somente à parte que essa pessoa irá adquirir (50%)."

Practical Calculation Examples

One of the most discussed measures of the package is the introduction of a fixed 7.5% IMT rate for non-resident buyers. This rate applies regardless of property value, without the progressive scale that applies to residents.

For comparison: a resident buying a property for €500,000 pays IMT at an effective rate of about 6-7% (depending on the bracket), while a non-resident will pay a fixed 7.5%. For more expensive properties, the difference becomes less significant, and for properties over €1 million, the non-resident rate may even be more favorable than the resident rate.

To stimulate the rental market and increase housing supply, the government has introduced significant tax benefits for landlords who rent out properties at moderate rates.

Benefits for Tenants

The package also includes increased tax deductions for tenants. The deduction for rent payments in IRS declarations is increasing:

To stimulate construction of affordable housing, the government has introduced a reduced VAT rate of 6% (instead of the standard 23%) for construction and renovation of residential properties.

This measure is aimed at reducing the cost of new construction and making housing more affordable for buyers. The benefit applies to both new construction and major renovation of existing buildings.