Source: Adobe Stock Author: Rafael Parreira, Managing Partner da P&A Legal Exemption from IMT and Stamp Duty in self-build for young people The Tax and Customs Authority (AT) has definitively clarified a question that has concerned many young people: the exemption from Municipal Tax on Onerous Transfers of Inmuebles (IMT) and Stamp Duty (IS) for those under 35 does not apply to the purchase of land for construction, even if a residential project is already underway on the site. What the Law Says The tax benefit, provided for in paragraph 2 of article 9 of the IMT Code, establishes very specific conditions for the exemption. It applies exclusively to the first acquisition of an urban inmueble or autonomous unit intended solely for own and permanent residence, whose value does not exceed €324,058, by young people up to 35 years old who are not considered dependents for IRS purposes. The key word here is “intended”. The AT is clear: land for construction is not, at the moment of purchase, intended for habitation — it is only potentially suitable for that purpose once construction is completed. The Specific Case That Led to the Clarification The AT’s binding information came following a request from a couple who had bought land for construction where a residential project had already started, but without an occupancy permit. They asked if they could benefit from the IMT and Stamp Duty exemption. The Tax Authority’s answer was categorical: no. According to the AT, “as the urban inmueble is land for construction, it is inherently unsuitable for the purpose on which the exemption depends (own and permanent residence).” Practical Consequences This interpretation has significant implications for young people planning to build their first home: 1. Applicable taxation: Land for construction is subject to a fixed IMT rate of 6.5%, regardless of whether a building has started on the land. 2. Irrelevance of ongoing works: For tax purposes, it is entirely irrelevant if a construction has already started on the land. While the inmueble is classified as “land for construction” in the land registry, there is no access to the exemption. 3. Need for occupancy permit: Only when construction is completed and the inmueble is reclassified as an urban inmueble intended for habitation can it eventually benefit from tax exemptions — but at that point, it will no longer be the “acquisition” that qualifies for the Young IMT. Cumulative Requirements for the Exemption To benefit from the IMT and Stamp Duty exemption, young people must meet all of the following: Be 35 or younger on the date of transfer Not be considered a dependent for IRS purposes in the year of acquisition It must be the first acquisition of a residential inmueble Must not own any residential inmueble at the date of transfer or in the previous three years The inmueble must be intended solely for own and permanent residence The value must not exceed €324,058 (for full exemption) Partial exemption also applies to inmuebles valued between €324,058 and €648,022, with a reduced 8% rate applied to the excess. Maintaining the Benefit Even after acquisition, young people must keep the inmueble as their own and permanent residence for at least six years. Otherwise, they lose the benefit and must repay the unpaid tax, except in exceptional cases such as selling the inmueble, relocating more than 100 km for work, or changes in the household. Conclusion The Tax Authority’s clarification removes any room for interpretation: Young IMT applies exclusively to the purchase of already built, ready-to-live-in houses. Young people planning to build their first home must pay IMT at a 6.5% rate on the land value and, eventually, other taxes on construction. This restrictive interpretation of the law may be seen as an additional obstacle for young people dreaming of building their own home, reinforcing that the tax benefit was designed primarily to stimulate the existing real estate market rather than support new construction projects by private individuals.
Source: Adobe Stock Author: Redaction Euribor stable at three months Euribor showed varied behaviour this Monday, with the three-month rate holding at 1.999%. Despite the stability, Euribor remains below the longer terms, showing a slight upward slope in the curve. At the three-month term, Euribor did not change compared to the previous session, after having already fallen below 2% at the start of February. This index is used in around a quarter of variable-rate mortgage contracts in Portugal. According to the latest data, the three-month Euribor represented 25.09% of the stock of variable-rate loans for primary residences at the end of December. Euribor rises at six months The six-month Euribor, currently the most used term in mortgage lending in Portugal, increased to 2.155%, up 0.008 points from the previous session. Since January 2024, this term has led the preference for new contracts. According to the Bank of Portugal, the six-month Euribor accounted for 38.77% of all variable-rate loans for primary residences. Changes in this term directly affect the monthly repayments of thousands of families. The slight rise in the six-month Euribor occurs in a context of European Central Bank policy rate stabilization, as the ECB decided to keep interest rates unchanged at the last monetary policy meeting. Euribor falls at 12 months For the longer term, the 12-month Euribor decreased to 2.236%, down 0.012 points from the previous value. Despite the decline, the 12-month rate remains above the other terms, reflecting differentiated expectations regarding future rate developments. In terms of market share, the 12-month Euribor accounted for 31.85% of the variable-rate mortgage stock in December. Regarding monthly averages, Euribor fell in January across the three main terms: three months at 2.028%, six months at 2.137% and 12 months at 2.245%, with the most significant drop occurring at the longest term. Euribor developments continue to be closely monitored by households and companies, as the rate serves as the basis for calculating mortgage repayments in Portugal and is derived from the average rates at which 19 eurozone banks are willing to lend to each other in the interbank market.
Source: Adobe Stock Author: Redaction 6% VAT for all housing, not just permanent residence The application of the 6% VAT on housing is at the centre of the tax debate. The Order of Certified Accountants (OCC) considers that limiting this benefit to owner-occupied permanent housing creates practical difficulties and legal uncertainty. It therefore argues that the 6% VAT on housing should apply to all housing, provided the defined price limits are respected, promoting a greater supply in the property market. Risk of litigation in the application of reduced VAT According to the OCC, the current framework of the 6% VAT on housing may generate unnecessary litigation. The requirement to prove the intended use of the property increases the risk of errors and tax disputes. Broadening the concept would allow the 6% VAT on housing to be applied more clearly, reducing uncertainty for both builders and investors, as well as landlords. VAT regularisation without penalties for companies Another critical issue concerns the penalties applied when the tax is regularised. The OCC proposes the removal of fines and interest when companies correct VAT in favour of the State. In situations where a builder applies 23% out of caution and later verifies that the 6% VAT on housing could have been used, the regularisation should not be penalised, avoiding negative impacts on cash flow. Capital gains, income tax and measures to increase supply The Order also believes that proposals on capital gains are among the most effective measures to stimulate housing supply. It argues that the exemption should not depend on a minimum holding period and that fiscal measures should be combined. Regarding income tax, it warns of gaps in the legal framework for property income, particularly in the case of sole traders, reinforcing the need for greater legislative clarity.
Source: Adobe Stock Author: Redaction 2026 income tax cut has uneven impact on incomes The 2026 income tax cut will raise households’ disposable income, but the effects will not be evenly distributed. Analysis of fiscal and social impacts shows that a significant part of the middle class benefits only marginally. Measures in the 2026 State Budget primarily strengthen tax relief for higher earners, while middle-income households remain in an intermediate position, with limited access to social support and modest income tax benefits. The average overall impact on household incomes is around 0.7%, but this aggregated figure hides significant differences across the distribution. The increase results mainly from the update of income tax brackets and the reinforcement of the Solidarity Supplement for the Elderly, while other fiscal measures have reduced effects on most of the middle class’s disposable income. Middle class sees limited gains from tax relief For the middle class, the 2026 income tax cut translates into limited benefits. Many households are too well off to access social support and do not have high enough incomes to fully benefit from the tax reduction. The reduction of rates between the second and fifth brackets and the update of the personal allowance have a moderate effect, with more visible impacts only in higher brackets. Updating the bracket limits benefits higher incomes proportionally, reflecting the progressivity of income tax. For the poorer half of the population, the tax impact is almost nil, as many households still have no effective tax liability. The middle class therefore remains in an intermediate position, with modest increases in disposable income. Solidarity Supplement protects poorer pensioners At the other end of the distribution, low-income pensioners are the main beneficiaries of the planned social measures. The reinforcement of the Solidarity Supplement for the Elderly is the most redistributive policy, delivering significant increases in disposable income for the lowest deciles. This effect is concentrated among the poorest 20% of the population and diminishes rapidly in higher deciles. Updating the personal allowance also has a progressive profile, benefiting households with incomes near the minimum wage. Overall, the 2026 income tax cut protects lower incomes through social transfers, benefits higher incomes via tax relief, and leaves the middle class with marginal gains, in a context still marked by cumulative loss of purchasing power.
Source: Adobe Stock Author: Redaction What is the Digital Business Wallet The Digital Business Wallet is a new tool that centralises essential company documents in a secure and accessible digital space. Available documents include the Company Card, the Social Security Contribution Status Document, the Tax Status Document from the Tax Authority and the Central Register of Beneficial Ownership. This centralisation reduces the need to use multiple portals and paper documents, simplifying processes and saving time. For the Portuguese economy, this represents an improvement in administrative efficiency, allowing business owners to focus on strategic activities, growth and investment. Access to the wallet is free for basic documents, such as the Company Card and contributory and tax records, ensuring that all companies can benefit from digitalisation at no additional cost. Only some documents that are currently paid for may involve costs in the future, depending on the platform’s development. Benefits and features for the economy The Digital Business Wallet offers multiple advantages: it allows immediate proof of legal, tax and contributory status, opening bank accounts, collecting orders, taking part in public tenders and complying with legal obligations. The information comes from official public administration sources, ensuring validity equivalent to traditional methods. In addition, the platform will be developed in phases, with the future integration of additional services such as permanent commercial certificates, ENI profiles, SME certifications, electronic signatures and alerts on tax and contributory obligations. These features will strengthen the economy by enabling companies to reduce administrative costs, increase productivity and optimise internal management. The Digital Business Wallet also makes it easier to manage multiple companies or establishments within the same application. Each entity can be identified individually, making it easier to control different units and comply with legal obligations without complications. Security and accessibility Access to the Digital Business Wallet is provided through secure authentication, ensuring confidentiality, integrity and protection of business information. Only legal representatives or individuals with officially registered powers of representation can access the platform, ensuring data protection. This digitalisation contributes to the national economy by reducing waiting times, simplifying processes and allowing business owners to focus on growing their businesses. The interoperability planned with other European Union countries, under the eIDAS 2.0 regulation, further strengthens the economy by enabling Portuguese documents to be recognised internationally, opening doors to new markets. Future outlook With the expansion of the Digital Business Wallet, new features will be made available, including notifications and alerts on tax and contributory deadlines and the electronic signing of business documents. This modernisation represents a significant step forward for the Portuguese economy, stimulating competitiveness, efficiency and innovation in the business sector. The tool promises to transform the way companies interact with public administration, reducing bureaucracy and operating costs. The centralisation of documents and the digitalisation of processes represent a direct boost to the economy, contributing to a more agile, secure and modern business environment.
Source: Adobe Stock Author: Redaction Tax incentives and support for tenants The Government is preparing a set of measures focused on incentives to make the rental market more accessible. For tenants, the main benefits include an increased income tax deduction of €900 per year for moderate rent contracts and enhanced monthly support for families facing financial difficulties. These measures aim to reduce pressure on household income, ensuring more stable access to housing and contributing to the economic stability of the sector. In addition to deductions, rental guarantees ensure regular payments, protecting tenants and fostering a balanced relationship between tenants and landlords. This type of incentive reflects the Government’s priority to create conditions that combine social welfare with the sustainability of the property market. Benefits for landlords and investment in housing For landlords, incentives include reducing income tax on rental income from 25% to 10% for contracts with rents up to €2,300, encouraging the placement of properties in the affordable rental market. VAT on the construction of housing for these contracts is reduced to 6%, promoting new housing development and stimulating economic activity in the construction sector. Incentives also include capital gains exemptions on property sales if the proceeds are reinvested in affordable housing, and the creation of long-term rental investment contracts with additional tax benefits. These measures aim not only to increase housing supply but also to boost private investment and the economy linked to property construction and management. Modernising licensing and partnerships A key element of the incentives is the streamlining of urban planning approvals through electronic platforms, enabling new housing projects to be approved more quickly. Public-private partnerships also gain importance, integrating state-owned vacant properties into affordable rental schemes. These mechanisms help make the rental economy more efficient by reducing bureaucracy and accelerating the placement of properties on the market. Changes also include mandatory registration of new contracts on the Finance Portal and integrating vacant properties over 24 months into the Affordable Rental Scheme. Rent updates follow inflation, maintaining economic predictability for tenants and landlords without relying on extraordinary subsidies. Ongoing support programmes Programs such as Porta 65 Jovem and Porta 65+ remain active, with more flexible rules and accessible criteria. The Extraordinary Rent Support continues monthly payments of up to €200, assisting families with high rent-to-income ratios. These incentives demonstrate the Government’s commitment to sustainable policies that balance social support with economic dynamism, ensuring greater housing accessibility without compromising market stability. In summary, the incentives announced for 2026 combine fiscal measures, direct support, and administrative facilitation, benefiting both tenants and landlords, increasing housing supply, and promoting a more balanced rental economy.
Source: Adobe Stock Author: Redaction Property developers urge urgent VAT cut Property developers welcomed the approval of recent fiscal and regulatory measures for housing but warn that it is essential to speed up the reduction of construction VAT to 6%. The Portuguese Association of Property Developers and Investors (APPII) believes that any delay could jeopardise projects already under development, undermining public objectives to increase housing supply and promote affordable rental housing. For the sector, the final wording of the legislation is crucial. If the reduction in construction VAT does not cover the majority of projects currently underway, it could lead to outcomes contrary to those intended, such as a slowdown in investment and a loss of confidence in the national property market. Construction VAT is a long-standing demand of the sector The reduction of VAT from 23% to 6% on construction and renovation works intended for housing is a long-standing demand of property developers. APPII stresses that only a swift and clear implementation of these measures will create a more competitive, predictable and socially responsible market, capable of meeting families’ housing needs. The association also highlights that the positive impact of the reform of the Legal Regime for Urbanisation and Building depends on the final text approved. Simplifying procedures and reducing deadlines are seen as essential factors to accelerate new housing production and strengthen supply in the rental market. Housing package moves to parliamentary discussion The housing measures package has been approved in general terms by Parliament and now moves to discussion in the specialised committees. Proposals related to tax relief, including construction VAT, will be analysed by the Budget and Finance committee, while changes to the urban planning framework will be examined by the Infrastructure and Housing committee. Parliament has a 90-day deadline to complete this legislative process. After the final overall vote, the legislation will still need to be promulgated and published before coming into force. Property developers argue that speed at this stage is crucial to ensure sustainable investment, increase housing supply and help deliver prices more compatible with household incomes.
Source: Adobe Stock Author: Redaction Tax incentives for housing The approved tax package aims to increase the supply of homes in Portugal and make access to housing easier. Key measures include reducing VAT on construction to 6% and changes to personal income tax (IRS) on rents, especially for contracts up to €2,300 per month. These initiatives aim to make it more affordable to build new homes, rehabilitate existing properties, and encourage rental, benefiting both tenants and property developers. The simplification of urban planning licences is another central element of the plan. With less bureaucracy, obtaining authorisations for construction or rehabilitation will be faster, speeding up the introduction of new homes to the market. The focus of the tax package is therefore to increase the supply of properties more quickly, supporting families and investors. Impact on the real estate market With lower taxes and simpler procedures, the construction and rental sector may gain momentum. Property developers will face fewer barriers to launching new projects, while owners may experience lower costs when rehabilitating older properties. For tenants, these measures could mean a greater supply of housing at more balanced prices, especially in urban areas with high demand. Additionally, the simplification of licences may help reduce delays in completing new buildings, helping to balance supply and demand in the national real estate market. Next steps and outlook After approval in plenary, the proposals move to the parliamentary specialist committees for detailed analysis. During this phase, some measures may be adjusted or technical changes introduced. Only after this process will the package be enacted and published in the Official Gazette, becoming applicable. In the meantime, property developers and investors can prepare projects and assess opportunities, anticipating market changes. With these measures, access to housing is expected to improve in the medium term, increasing supply and encouraging rental, without creating exaggerated immediate impacts on rent prices.
Source: Adobe Stock Author: Redaction Fiscal and rent updates in 2026 The year 2026 brings significant changes to the housing market in Portugal, affecting owners, tenants and buyers alike. The rent update coefficient has been set at 1.0224, allowing increases of up to 2.24% from January. Practically, a rent of 700 euros could rise to 715.68 euros, while a 1,000-euro contract could increase to 1,022.40 euros. Landlords who have not updated rents over the last three years may apply cumulative increases exceeding 11%. Tenants must be notified at least one month in advance via registered letter. For tenants, the IRS deduction limit for rents also changes, rising from 700 euros to 900 euros in 2026, and to 1,000 euros in 2027. The government has also introduced the concept of “moderate rent,” up to 2,300 euros per month, and reduced the taxation of property income from 25% to 10%, applicable to new and existing contracts until 2029. The Simplified Affordable Rental Scheme fully exempts IRS for rents 20% below the municipal median, with minimum three-year contracts for permanent housing. Mortgages and guarantees for young buyers Variable-rate mortgages will again include early repayment fees from January, set at 0.5% of the repaid capital. This return affects borrowers wishing to reduce their outstanding debt before the due date. For young people up to 35 buying their first permanent home, the government raises the total IMT and Stamp Duty exemption limit to 330,539 euros, increasing access to affordable housing. The state has also reinforced the public guarantee for first-time homebuyers by 350 million euros, allowing financing of up to 100% of the property value, with the state acting as guarantor for up to 15%. This measure aims to support youth housing, enabling first-time buyers to access property without an initial deposit. Construction, permits and housing supply In 2026, the reduced VAT of 6% will benefit new homes for sale up to 648,000 euros, as well as rental buildings with rents up to 2,300 euros per month. The measure includes controlled deadlines for sale and rental, as well as partial VAT refunds for self-built homes. In addition, the Electronic Platform for Urban Procedures becomes mandatory on 5 January, standardising and digitalising the entire permitting process. This aims to streamline housing development and reduce municipal bureaucracy, helping increase housing supply. New constructions and reassessments will see the IMI value per square metre rise from 532 to 570 euros, raising the base price to 712.50 euros. This reflects market updates and directly impacts new housing, while existing properties maintain their tax value. Housing market outlook Despite government measures, prices are expected to continue rising in 2026, with growth estimated between 6% and 8%. The shortage of new builds and permits maintains pressure on supply, keeping housing central to household budgets. Fiscal incentives, simplified permitting and public investment may help balance the market, but practical effects will take several years to materialise. With changes in rents, mortgage adjustments and construction incentives, 2026 will be a pivotal year for housing in Portugal. Owners, tenants and buyers must plan carefully, as these measures directly affect the cost of housing and family finances. Housing remains a strategic challenge, and decisions taken this year may shape the market’s direction for years to come.
Source: Adobe Stock Author: Redaction Tax incentives to boost housing The European Union currently faces a significant challenge in the housing sector, with an estimated shortage of millions of residential units across several countries. To address this problem, a proposal has emerged to apply a “super-reduced” VAT rate on housing construction and renovation, including rental, with rates between 2% and 5%, below the current minimum allowed. The aim is to facilitate the development of new residential projects and make housing more accessible to families and young people who face difficulties buying or renting a home. The measure intends to reduce initial construction and renovation costs, enabling both the private and public sectors to accelerate the delivery of new housing. Automatic application at the European level could create a uniform stimulus across all member states, promoting consistent and sustainable investment in the residential real estate sector. Addressing the housing supply shortage The housing problem in Europe is linked to multiple factors. In many countries, supply does not meet demand due to scarce available land, rising construction costs, and lengthy licensing processes. Additionally, access to finance remains limited, restricting the private sector’s capacity to develop large-scale urban projects. The implementation of tax incentives, such as VAT reduction, emerges as a practical solution to increase housing supply. At the same time, national and regional governments are called upon to promote public policies that complement private initiatives through the construction of public housing or public-private partnerships. These models have already shown results in countries that manage to combine strategic public intervention with private sector dynamism, generating accessible and sustainable residential developments. Complementary measures for the housing market Beyond VAT reduction, other actions can accelerate the availability of affordable housing. Simplifying environmental, energy efficiency, and urban planning regulations is essential to reduce bureaucratic obstacles that delay new projects. The creation of dedicated affordable housing funds, supported by European resources, can provide additional capital for large-scale initiatives, increasing delivery capacity and ensuring quality and durability. These measures do not have immediate effects but establish a solid foundation for a more balanced and sustainable housing market. The European strategy aims to combine fiscal policies, incentives for the private sector, and expansion of public housing to ensure supply meets demand and responds to the needs of growing urban populations. Expected impact on the housing sector Applying a “super-reduced” VAT and promoting integrated public policies could transform the housing landscape in Europe. With lower construction and renovation costs, the private sector will have greater capacity to invest in and develop residential projects. Strengthening the public housing stock and creating affordable housing are essential steps to ensure that families of different incomes have access to decent housing. In the long term, these measures could stabilise prices, increase housing availability, and promote a more predictable and sustainable market. The combination of tax incentives, active public policies, and process simplification creates favourable conditions for strategic investment in the housing sector, benefiting both investors and citizens seeking affordable places to live. Housing, therefore, is seen not only as a social necessity but also as an economic driver capable of generating employment, investment, and balanced urban growth. Consolidating these policies could position the European Union as a benchmark for creating affordable, efficient, and sustainable housing, ensuring that cities and regions meet the current and future needs of the population.
Source: Adobe Stock Author: Redaction h3 { margin-top: 0.25cm; margin-bottom: 0.21cm; direction: ltr; color: #000000; orphans: 2; widows: 2; background: transparent; page-break-after: avoid }h3.western { font-family: Liberation Serif, Times New Roman, serif; font-size: 14pt; so-language: pt-PT; font-weight: bold }h3.cjk { font-family: Noto Serif CJK SC; font-size: 14pt; so-language: zh-CN; font-weight: bold }h3.ctl { font-family: Lohit Devanagari; font-size: 14pt; so-language: hi-IN; font-weight: bold }p { margin-bottom: 0.25cm; direction: ltr; color: #000000; line-height: 115%; orphans: 2; widows: 2; background: transparent }p.western { font-family: Liberation Serif, Times New Roman, serif; font-size: 12pt; so-language: pt-PT }p.cjk { font-family: Noto Serif CJK SC; font-size: 12pt; so-language: zh-CN }p.ctl { font-family: Lohit Devanagari; font-size: 12pt; so-language: hi-IN } h3 { margin-top: 0.25cm; margin-bottom: 0.21cm; direction: ltr; color: #000000; orphans: 2; widows: 2; background: transparent; page-break-after: avoid }h3.western { font-family: Liberation Serif, Times New Roman, serif; font-size: 14pt; so-language: pt-PT; font-weight: bold }h3.cjk { font-family: Noto Serif CJK SC; font-size: 14pt; so-language: zh-CN; font-weight: bold }h3.ctl { font-family: Lohit Devanagari; font-size: 14pt; so-language: hi-IN; font-weight: bold }p { margin-bottom: 0.25cm; direction: ltr; color: #000000; line-height: 115%; orphans: 2; widows: 2; background: transparent }p.western { font-family: Liberation Serif, Times New Roman, serif; font-size: 12pt; so-language: pt-PT }p.cjk { font-family: Noto Serif CJK SC; font-size: 12pt; so-language: zh-CN }p.ctl { font-family: Lohit Devanagari; font-size: 12pt; so-language: hi-IN } Reduction of IMI for urban buildings The Municipal Council of Loures approved a reduction of the IMI rate for urban buildings, from 0.362% to 0.361%. The so-called “family IMI” remains, providing discounts for households with dependents: €30 for one dependent, €70 for two, and €140 for three or more. The IMI rate in Portugal can vary between 0.3% and 0.45%, with municipalities setting the rate within this range. The measure in Loures represents an estimated revenue decrease of €820,000 but aims to support families and make the municipality more attractive for housing. IRS share and fiscal impact Regarding IRS, the participation rate drops from 4.70% to 4.65%, staying below the maximum limit of 5%. This reduction aims to balance the tax burden for taxpayers, contributing to higher disposable income for families and encouraging local spending. At the same time, the Council approved the creation of a municipal surcharge of 1.5% on the taxable profits of companies with a turnover above €150,000, keeping smaller businesses exempt. This measure helps fund municipal services without penalising small enterprises. Benefits for residents and businesses The combination of IMI reduction, IRS share adjustment, and the surcharge aims to support both families and businesses in Loures. Families benefit from lower taxes, while medium and large companies contribute proportionally, ensuring the municipality’s financial sustainability. These changes reflect the concern to balance municipal revenue with direct support for taxpayers, promoting residency, investment, and local economic activity. Adjusting the rates seeks to make Loures more competitive and attractive for housing and business, with positive impacts on residents’ daily lives and the municipality’s economic development.
Source: Adobe Stock Author: Redaction Gradual corporate tax reduction until 2028 The new corporate tax reduction sets out a progressive downward path for rates applied to companies over the next three years. In 2026, the general tax rate will fall from 20% to 19%, applying to income earned that year. In 2027, it will drop to 18%, and the following year to 17%. This gradual evolution aims to strengthen Portugal’s tax competitiveness compared to other European markets, making the country more attractive for both domestic and foreign investment. By reducing the tax burden on corporate profits, the Government aims to boost the modernisation of the productive sector and support value creation. The reduction in corporate tax also positively impacts companies’ ability to reinvest profits, finance new operations and strengthen financial stability. This fiscal adjustment occurs within a context of sustained economic growth and policies that encourage innovation and productivity. Additional benefits for small and medium-sized enterprises The corporate tax reduction also extends to small and medium-sized enterprises (SMEs), which will benefit from a more advantageous rate on the first €50,000 of taxable income. This rate, currently set at 16%, will drop to 15% as early as 2026. This fiscal relief represents an opportunity for SMEs to strengthen liquidity, invest in digital transformation, hire new employees and increase competitiveness. For many of these companies, especially those operating in traditional sectors, the measure could translate into additional profitability and sustainability margins. The tax reduction applied to this segment of the national economy directly stimulates entrepreneurship, encouraging job creation and the development of new business initiatives. Economic impact of the corporate tax reduction The corporate tax rate cut has direct implications for public finances and the real economy. According to official estimates, a one-percentage-point reduction represents a decrease in tax revenue of around €300 million. However, the expected multiplier effect on investment and business growth may offset part of this loss through increased economic activity. Companies benefiting from the corporate tax reduction will have greater capacity to invest in innovation, energy efficiency and internationalisation. By freeing up financial resources, the measure contributes to higher productivity and promotes sustainable medium-term growth. Moreover, the tax relief creates more favourable conditions for business financing, reducing the weight of tax obligations on corporate income and strengthening Portugal’s business ecosystem. A measure to stimulate the national economy With the corporate tax reduction, Portugal strengthens its position as a competitive destination for investment. The gradual rate decrease to 17% by 2028 aims to consolidate business confidence, encourage the creation of new companies and foster the country’s reindustrialisation. This policy of reducing corporate tax plays an essential role in balancing fiscal sustainability with economic stimulus. By promoting a more predictable and competitive tax environment, Portugal moves closer to European averages, enhancing its appeal to investors and international startups. In the medium term, the measure is expected to contribute to economic diversification, increased productivity and stronger value chains. The corporate tax reduction is, therefore, a strategic tool to support economic growth, business innovation and the consolidation of Portugal as a modern and competitive economy.
中文(简体)
Português
English
Français
Español
Deutsch
Nederlands
Русский
