Does a renovation carry VAT at 6 per cent?
It can. Portugal's reduced VAT rate on the mainland is 6 per cent, and verba 2.27 of Lista I to the VAT code applies it to contracted works of improvement, remodelling, renovation, restoration, repair or conservation on a property, or an autonomous fraction, allocated to housing. It does not require the property to sit inside an urban rehabilitation area, and it does not require it to be your permanent home. Those are conditions from two other verbas, and all three rules get merged constantly: the urban rehabilitation area belongs to verba 2.23, and the permanent home to verba 2.42.1, a 2026 rule aimed at whoever builds or rehabilitates a dwelling for sale or letting rather than at whoever lives in it. Cleaning, green-space maintenance, work on pools, saunas, tennis courts, golf, minigolf and similar installations are outside it, and so are new construction, extensions, adding a storey and reconstruction.
The rest turns on how the invoice is written. There has to be a contract of empreitada; the property must not be licensed for another purpose and has to be actually used as a dwelling both when the works start and after them, which puts a property used for a professional, commercial, industrial or service activity outside the verba; and the dono da obra may be the owner, the tenant or the condominium. Materials count: if the incorporated materials are 20 per cent or less of the total, the whole invoice goes at 6 per cent; above that, labour and materials must be itemised, at 6 per cent and 23 per cent respectively. The trap is the third case, and it only exists above the 20 per cent line: once materials pass it, an invoice issued at one global price, without labour and materials split out, loses the verba entirely and is taxed at 23 per cent throughout. Below 20 per cent that risk does not arise, because the whole invoice is at 6 per cent anyway. The invoice also has to state the reduced rate under verba 2.27 and identify the dono da obra and the property. Source: Código do IVA, article 18.º n.º 1 a) and verba 2.27 of Lista I, with Autoridade Tributária binding information, read in August 2026. National scope.
Nothing here says whether a particular job qualifies. That is for whoever issues the invoice, which is exactly why it is worth asking before comparing two quotes: one of them may be at 6 and the other at 23. If someone tells you the answer depends on your town being in an ARU, that is verba 2.23, and the câmara of your concelho is where that question is answered.
What determines the price?
As of 2026, the quote is driven by a short list of concrete things: whether plumbing and electrics move, whether the floor comes up, the square metres of tiling and the tile chosen, the specification of the sanitaryware or the kitchen units, waste removal and access, and whether the room is in a villa with a driveway or a third floor apartment with no lift. Labour and materials are quoted separately, because they behave differently: you can change the tile you buy without changing the work, and you should be able to see that.
No renovation is quoted properly from a description alone. The written quote follows a look at the room, and it says what is included, what is provisional, and what happens if something unexpected appears behind a wall. See how it works for the process from request to finished job.
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Related services
- Tiling: when the job is the tiling rather than the whole room
- Waterproofing & damp: for tanking and for damp that needs solving before finishes go on
- Insulation: when walls or the roof are being opened anyway and insulating them is a decision for now
- Plumbing: for the pipework side on its own
- Electrician: for sockets, lighting and the circuit a new kitchen needs
- Drywall & plastering: for partitions, ceilings and the plastering inside the room
- Painting: for the finish once the tiling and the fittings are in