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Housing fiscal package awaits presidential approval

Monday, 11 May 2026AI summary
🏠 Property🏛️ Government#property-market#housing-crisis#government-policy#tax-reform
Housing fiscal package awaits presidential approval
Photo: Correio da Manhã

A legislative package aimed at addressing the housing crisis, which includes reducing the value-added tax (Imposto sobre o Valor Acrescentado or IVA) on construction to 6% and lowering income tax (Imposto sobre o Rendimento das Pessoas Singulares or IRS) on rental income, remains at the Presidency of the Republic. President António José Seguro has been reviewing the decree-law for approximately one month following its approval by the Council of Ministers.

Update: President has until May 24 to review housing package

President António José Seguro must decide whether to promulgate the housing fiscal package by May 24. Additionally, he is expected to rule on the simplification of construction licensing processes by the end of May.

Context & Explainers

VAT is Value Added Tax (Imposto sobre o Valor Acrescentado), a consumption tax charged at each stage of production and sale; the standard mainland rate in Portugal is 23%. Parliamentary proposals to cut VAT on bottled gas from 23% to 6% would directly reduce consumer prices if approved.

The IRS withholding tables (tabelas de retenção na fonte) are government-published schedules that determine how much personal income tax (Imposto sobre o Rendimento das Pessoas Singulares — IRS) employers must deduct from each paycheck. They take into account gross pay, marital status, number of dependents, and disability status.

The tables are updated annually (and sometimes mid-year when budgets change), directly affecting monthly take-home pay. When tables are revised downward, workers see more in their pay packet; when raised, less. Any difference between amounts withheld and the actual tax owed is settled when the annual IRS return (Modelo 3) is filed, typically between April and June.

Employees and pensioners should check the current tables — published by the Autoridade Tributária e Aduaneira (AT) — whenever they change, as the impact on net income can be significant.

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