Tax advisor warns of gaps in the application of VAT at 6%

The application of a 6% VAT on housing construction is unclear, causing confusion among real estate developers. They are uncertain about the tax rate to apply when receiving invoices from builders, as it depends on whether the buyer will use the property as their permanent residence. This uncertainty can lead to penalties and interest charges. Bruno Neves, a tax expert, argues that the law should apply to all housing, not just permanent residences, as the construction process takes several years. He warns that developers might have to refund VAT, similar to past issues in urban rehabilitation projects. The reduced VAT rate applies to housing initiatives between September 25, 2025, and December 31, 2029, with specific conditions for rental and sale prices.