Portugal urban rehabilitation area (ARU): what it gives you

How to find out if you are in one

Each council declares its own ARUs, so there is no single national map. The council publishes the decision in the Diário da República (the official gazette) and normally keeps a page with the delimitation map, the descriptive report and a contact. Some councils have one ARU for the town centre, others have dozens. Use the municipality pages on this site to find the council page, then check your street on its map or ask the council to confirm.

Reduced VAT on works

• The standard VAT rate on the mainland is 23 per cent. Goods and services in the reduced list (Lista I) are charged at 6 per cent (CIVA, article 18).
• Item 2.23 of that list covers building rehabilitation contracts (empreitadas de reabilitação de edifícios) in an ARU, and the construction or rehabilitation of public-use facilities in an ARU. It also covers works under operations of national public interest.
• The item was reworded by Lei n.º 56/2023 of 6 October. It does not apply where the licence, prior notice or prior information request was filed with the council before that law came into force.
• The Azores and Madeira can set their own lower rates.

Property tax (IMI) and transfer tax (IMT)

These come from article 45 of the Tax Benefits Statute (Estatuto dos Benefícios Fiscais). A building qualifies if it was finished more than 30 years ago or is in an ARU, and the works follow the urban rehabilitation regime (Decreto-Lei n.º 307/2009) or the exceptional regime of Decreto-Lei n.º 53/2014. The building's condition must rise by two levels and reach at least "good", and the energy and thermal rules must be met.

• IMI: exemption for three years from the year the works finish. It can be renewed for five more years if the home is let as a permanent residence or is the owner's own permanent home.
• IMT on buying: exemption when you buy a property to rehabilitate and start the works within three years.
• IMT on the first sale after the works: exemption when the buyer will let it as a permanent home or, in an ARU, live in it as their own permanent home.
• Half the fee for the condition assessment.

The council decides whether to renew the IMI exemption: the municipal assembly has to approve it. The exemption on the first sale lapses if the property is given a different use within six years, or is not let or occupied as a permanent home within the set deadlines. You cannot stack it with similar benefits, but you can choose the better one. The recognition is requested together with the works application, and the council tells the tax office within 20 days.

Income tax (IRS) deduction

Article 71 of the same statute lets an owner deduct 30 per cent of rehabilitation costs from the IRS bill, up to 500 euros. The property must be in an ARU and rehabilitated in line with its strategy, or be a let property eligible for the phased rent update under the new urban lease regime. The costs must be proved and certified beforehand by the ARU management body or the municipal arbitration commission.

Most other numbers of article 71 were repealed by Lei n.º 56/2023 of 6 October, so older guides that quote them may be out of date.

What to do next

• Ask the council to confirm that your address is inside an ARU and which operation applies.
• Ask for the certification before the works start, not after.
• Check the tax office for the exact conditions that apply to your case.

Sources

• Tax Authority: Estatuto dos Benefícios Fiscais, article 45
• Tax Authority: Estatuto dos Benefícios Fiscais, article 71
• Tax Authority: CIVA, Lista I, item 2.23
• Tax Authority: CIVA, article 18