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Municipal incentives

Urban rehabilitation - Real Estate Tax and VAT exemptions

Municipal Real Estate Tax (IMI) exemption:
Rehabilitated buildings located in the following urban rehabilitation areas (ARUs), as well as all urban buildings built more than 30 years ago, are exempt from IMI.

Two non-cumulative regimes are applicable:
  • The exemption provided for in the Estatuto dos Benefícios Fiscais (EBF): granted for a period of three years, starting from the year when the rehabilitation works were completed. It can be renewed for an additional five years at the owner’s request, in the case of properties used for rental for permanent housing or for the beneficiary’s own permanent residence;
  • The exemption provided for in the Regulation of Municipal Tax Exemptions of the Municipality of Porto (RIIMMP): granted for a period of five years, without a possibility of renewal.

Municipal Real Estate Transfer Tax (IMT) exemption:
Onerous transfers of real estate are exempt from IMT on the acquisition of real estate destined for rehabilitation, provided the purchaser begins the rehabilitation works within a maximum period of three years from the date the acquisition is made.

Reduced Value Added Tax (VAT - IVA) rate:
Urban rehabilitation contracts carried out in real estate or public property located in urban rehabilitation areas (critical areas for urban recovery and reconversion, intervention areas of urban rehabilitation companies and others), or carried out within the scope of requalification and rehabilitation operations of recognised national public interest are subject to a reduced VAT rate of 6%.


Municipal Real Estate Tax (IMI) and Municipal Real Estate Transfer Tax (IMT) exemptions:
  • Buildings that have been subject to rehabilitation, under the terms foreseen in the Urban Rehabilitation Legal Regime (Regime Jurídico de Reabilitação Urbana);
  • The preservation state of the buildings must rise by two levels and reach the level "Good” ("Bom”), as a result of the intervention. The energy efficiency and thermal quality requirements foreseen in the applicable law must also be met;
  • Buildings must comply with the legal requirements of the Energy Certification System for Buildings (Sistema de Certificação Energética dos Edifícios) and present the elements laid down in the subparagraphs of no. 2 and no. 3 of article 15 of the RIIMMP, depending on whether they are buildings or autonomous fractions for residential or non-residential purposes.

How to obtain

The recognition of the urban rehabilitation intervention for the purposes of obtaining the aforementioned tax benefits must be requested from the Municipality of Porto, together with the prior notice or the application for the urban operation license. The request can be made through an appropriate form.