Public authorities in Portugal support urban renovation and the reconstruction of old buildings in the cities. So, you can benefit from different support programs and tax-breaks if you decide to start a rebuilding project. These are some of them:
In Faial island, for example, if you decide to renew a building located in Horta’s Special Rehabilitation Zone (ARU – the area marked in red in the image) you can apply to the following tax benefits:
- Reduced VAT (from 18% to 5%) in all expenses with the reconstruction;
- Property Tax (IMI) exemption for 5 years;
- Transmission Tax (IMT) exemption, if you start reconstruction up to 3 years after purchase of the property;
- Expenses with the reconstruction are deductible from Income Tax (IRS).
To know more about these tax benefits, you should contact Horta’s City Hall. Similar programs exist for other towns in other islands. We can help you find the information you’re looking for.
But you can also apply for more direct forms of incentive supplied by the State ate the Regional Level and at the National Level.
The Regional Government of the Azores has a specialized agency to help foreign investors and they manage several incentive programs you can apply to.
For Urban Rehabilitation, you can get up to 75% of the investment subsidized and 80% of the banking spread.
But programs to partially subsidize costs to improve the energy consumption or to repair termite damages also exist and you should use them. Once again, we can help you navigate the bureaucracy involved.
But you can also apply for incentives from the Portuguese National Government. You can get loans with interest bellow market rates and grace periods that can go up to 4 years, besides the tax benefits mentioned above.
All in all, the rehabilitation of old buildings in the cities, even it they aren’t always the easiest projects, make up good and solid investments. The cities historical centres are always sought after. With the existing systems of incentives and subsidies make them a very attractive business. Besides the direct return on your property, you will be promoting a healthier and alive urban real-estate market and helping revive the heritage of your community. They’re a win-win endeavour.
Urban Zone supporting incentives for renovations in Horta
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