Real estate investors advocate reduction of VAT on construction

This article is an abbreviated version of the original. To read the full article, click here.

The Portuguese Association of Promoters and Real Estate Investors (APPII) argues that the VAT on the construction of new homes should be reduced from the current 23% to 6%, similarly to what already happens in urban rehabilitation, or alternatively that can be deduced as it happens in other European countries, as is the case in Spain.

The request is not new, but the association understands that now is the right time to strengthen it. Not only because the housing issue is hot and it is urgent to make more houses for the middle class, but also because the current regime has been contributing to alienate the various international investors who have shown interest in doing works in the country.

According to the head of APPII, in addition to bringing more investors to the country, this measure would contribute to lower the price of works and projects in general and, consequently, the final sale or rental prices of houses. "And the best part is that it would not even represent a cost in the state accounts." Incidentally, "nor would it be a budgetary loss," quite the opposite. "At the moment the state is not gaining almost nothing in this way because the new construction has been practically nonexistent. With the reduction of VAT to 6%, the private sector felt encouraged, soon there would be more projects and therefore more tax revenue, "he explains.