All about the new housing package.

With the aim of reducing costs in construction, encouraging the lease market, and easing the tax burden for home buyers, the Government has launched a new housing stimulus package.

The concept of "moderate value"

The new package of measures to encourage housing and rental (approved by Decree Law No. 97/2026) introduced a profound change in the real estate market: the focus on tax relief to combat the housing shortage.

The main pillar of this package is based on the creation of the concept of "moderate value," which serves as a maximum ceiling for access to state benefits. For the sale of real estate, eligible properties have a maximum purchase price of around 660,982 euros (corresponding to the limit of the 2nd bracket of IMT). In the rental market, contracts with rents not exceeding 2,300 euros per month are covered (2.5 times the minimum wage of 2026).

Reduced VAT on home construction.

One of the biggest incentives for those who want to build or buy a new house is the application of the reduced VAT rate of 6% in building or renovating properties.

This VAT reduction applies as long as the property is intended exclusively for the buyer's own and permanent housing or for residential rental (both within the limits of "moderate value"). In the case of resorting to "self-construction", the owner may request from the State the refund of the difference between the normal VAT rate and the reduced rate.

More benefits in IRS and help with rent.

For families living in rented houses, the final IRS bill will be lighter. The annual deduction for rental expenses has increased to 900 euros in 2026, with a planned increase to 1,000 euros from 2027.

For those planning to sell a house, the Government has also made an important exception: real estate gains (the profit generated in the sale) are exempt from IRS payment if that amount is fully reinvested in properties intended for moderate rental housing.

Advantages for landlords

The package did not forget those who put houses on the market. Landlords who practice rents up to 2,300 euros benefit from a drastic reduction in the autonomous IRS tax rate, which drops from 25% to 10% (in effect until 2029).

In addition, for contracts entered into under the new Simplified Affordable Rental Regime, where rents are lower than 80% of the median income of the respective municipality, rental income is completely exempt from IRS and IRC payments.

Exemptions in purchase with controlled costs

For those planning to buy a house, the new decree defined very clear exemptions. In the acquisition of homes integrated into the controlled cost housing regime (intended for own and permanent housing), buyers ensure exemption from IMT and a reduction in Stamp Duty. It is an immediate saving that allows families to channel that money to approval of bank credit or moving costs.

Do you know how much you can buy a house for with the new benefits in place?

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