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6% IVA on Home Renovation Works

Verba 2.27 · materiais 20% · Portugal continental

Check whether a repair, remodelling or conservation job on a home can use 6% IVA in mainland Portugal and calculate the impact of the 20% materials rule.

By Elijah·UPDATED OCTOBER 2026·4 MIN·OFFICIAL SOURCES
KEY FACTS
Reduced rate
6% in mainland Portugal if item 2.27 applies
Standard rate
23% in mainland Portugal for what falls outside the rule
Materials
6% on all if materials are up to 20% of the total
Invoice
if materials exceed 20%, split labour and materials
€
€
DETALHE DA FATURA
VERIFICAÇÃO DE ELEGIBILIDADE
Base oficialLista I verba 2.27 do CIVA; Ofício-Circulado 30135 da AT: habitação, exclusões, materiais ≤20% e fatura discriminada.
TOTAL COM IVA
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Total sem IVA-
Peso dos materiais-
Base a 6%-
Base a 23%-
IVA a 6%-
IVA a 23%-
IVA total-
Poupança vs 23% em tudo-
NOTA PARA A FATURA-
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How this works

The reduced rate for home works looks simple, but the tax authority separates three checks: whether the property is effectively used as housing, whether the works fall under item 2.27, and how much incorporated materials weigh. This tool combines those checks and shows what is taxed at 6% or 23% before you accept a quote.

  1. 1
    Check that the work is on housing
    Item 2.27 only covers works contracts on properties or units used as housing: the property must be used as housing at the start of the work and continue to be used that way afterwards. It does not cover properties licensed for other purposes, vacant properties for sale/rent or properties used for business activity.
  2. 2
    Separate eligible work from exclusions
    Improvement, remodelling, renovation, restoration, repair and conservation may qualify. Cleaning, garden maintenance, pools, saunas, tennis/golf/minigolf courts, new construction, extensions, reconstruction and equipment supply stay outside this calculation.
  3. 3
    Calculate the materials percentage
    The tax authority looks at the total contract value. If incorporated materials are 20% or less of the total, the reduced rate can apply to the whole contract. If they exceed 20%, services are at 6% and materials at 23%, provided the invoice is itemised.
  4. 4
    Read the invoice before accepting it
    When the reduced rate is used, the invoice should identify the work owner, the property/unit and the reason for the reduced rate. If materials above 20% are charged as one global price without a split, the tax authority says the whole amount is taxed at the standard rate.

Frequently asked

Which home works can have 6% IVA?
In mainland Portugal, item 2.27 covers improvement, remodelling, renovation, restoration, repair or conservation works contracts on housing properties, with express exclusions. This tool starts from that rule and does not cover special regimes such as urban rehabilitation or affordable-housing construction.
If materials exceed 20%, do I always lose the 6% IVA?
Not necessarily. If the invoice splits services/labour from materials, the reduced rate can apply to services and the standard rate to materials. If there is only a global price, item 2.27 does not apply and the whole amount is at the standard rate.
Do kitchens, lifts or equipment qualify at 6%?
Official Circular Letter 30135 says the supply of lifts, escalators, heating, cooling, kitchens, fireplaces, domestic equipment and furniture does not fall under item 2.27 and is taxed at the standard rate, even if intended for a home.
Does this also work for Madeira and the Azores?
No. This calculator uses mainland rates: 6% and 23%. The autonomous regions may have their own rates; confirm the applicable rate on the invoice and in the IVA Code before deciding.
Does this replace checking with the contractor or accountant?
No. It helps check the general rule before accepting a quote or asking for a corrected invoice. Mixed cases, urban rehabilitation, partly residential properties, reverse charge, insurance claims or works under special regimes should be checked with a professional and official sources.
OFFICIAL SOURCES
DISCLAIMER
Informational tool, checked on 6 October 2026 against IVA Code article 18 and List I item 2.27, Official Circular Letter 30135 and Binding Information 15421 from the Portuguese tax authority. It assumes mainland Portugal, a works contract on an effectively residential property and values before IVA. It does not cover Madeira/Azores, urban rehabilitation, new item 2.42, reverse charge, mixed properties without itemisation, insurance claims, new construction, reconstruction, extensions, equipment or the real invoice. Not tax advice.