Today we give you a different insight on urban renovation and where it benefits Azores.
The public authorities in Portugal, including the Regional Government of the Azores, actively support urban renovation and the reconstruction of old buildings, offering various incentive programs and tax breaks. For instance, in Faial Island’s Special Rehabilitation Zone, renovators can enjoy reduced VAT, property tax exemption for five years, transmission tax exemption if reconstruction begins within three years of property purchase, and deductible expenses from Income Tax. Similar programs exist for other towns in different islands.
Beyond local initiatives, direct forms of incentive are available at both the regional and national levels. The Regional Government of the Azores manages programs offering up to 75% subsidy on investments for urban rehabilitation, along with an 80% subsidy on banking spread. Additional programs subsidize costs for improving energy consumption or repairing termite damages.
At the national level, incentives from the Portuguese National Government include low-interest loans with grace periods of up to four years, in addition to the aforementioned tax benefits.
Despite potential challenges, the rehabilitation of old buildings in cities represents solid and lucrative investments. Historical city centers are highly sought after, and with existing incentive systems, they become attractive business opportunities. Apart from the direct return on property, investors contribute to a vibrant urban real estate market and the preservation of community heritage, creating a mutually beneficial scenario – a win-win endeavor.