As a strategy of boosting and invigorate the real estate market in Portugal, the Portuguese Government agreed to provide a set of tax benefits aimed mainly at Promotors, Developers, Real Estate investors and at purchasers of final products, of which we highlight:

Pursuant to Article 45^th of the Fiscal Benefits Statute (EBF), purchases of urban buildings for urban rehabilitation are exempt from IMT, provided that the purchaser commences its urban rehabilitation works within three years of the acquisition . It is an exemption which operates by reimbursement, that is to say, the amount paid as a tax; The acquisition of rehabilitated properties, pursuant to article 71^st of the EBF, is also exempt from IMT, provided that:

1. It is exclusively destined to own housing and permanent residence;
2. If it is the first onerous transmission of the rehabilitated building or fraction;
3. The property is located in "urban rehabilitation area" or is urban leased buildings that can be staggered annually in accordance with articles 27^th and subsequent of the New Urban Lease Regime;
4. The Urban rehabilitation started after January the 1^st 2008 and is completed by December the 31^st 2020.

Pursuant to article 45^th of the EBF, urban buildings subject to urban rehabilitation are exempt from Municipal Property Tax (IMI) for a period of three years counting from the year in which the building permit was issued.

The exemption shall only apply if the requirements referred to in point 2.1 above have been fulfilled. Meaning: (i) the work must be included in the definition of urban rehabilitation; (ii) energy rating equal to or greater than or attribution of energy class higher than previously certified, by at least two levels; and (iii) recognition of the exemption by the competent entity, usually, the Municipality of the area of the property.

Accordingly to Article 71^st, the acquisition of rehabilitated properties is exempt from IMI for a period of five years from the year in which the rehabilitation was completed. It is possible to renew the exemption for an additional period of five years.

Urban rehabilitation works are subject to a reduced rate of Value Added Tax (VAT) of 6%, provided that:

1. It is an urban rehabilitation project, that is to say, the form of integrated intervention on the existing urban fabric, where the urban and real estate heritage is maintained, in its whole or partially, and modernized by carrying out remodeling or improvement works of urban infrastructure systems, equipment and urban or green spaces for collective use and construction, reconstruction, expansion, alteration, conservation or demolition of buildings, as defined in the Legal Regime of Urban Rehabilitation (DL n.º 307 / 2009, of October the 23^rd);
2. A works contract has been signed;
3. The property is located in Urban Rehabilitation Area

Income, of any nature, obtained by Real Estate Investment Funds, pursuant to article 71^st of the EBF, shall be exempt from IRC, provided that:

1. Have been set up between January the 1^st 2008 and December the 31^st 2013;
2. At least 75% of its assets are real estate property subject to rehabilitation actions carried out in the areas of urban rehabilitation.

Income relating to units of investment funds referred to in the preceding paragraph, paid or made available to the respective holders, whether by distribution or through a redemption operation, shall be subject to IRS withholding tax or IRC at the rate of 10% (with the exceptions provided in the EBF).

Capital gains earned by taxpayers resident in Portuguese territory are taxed at an autonomous rate of 5%, without prejudice to the option for incorporation, when they are entirely due to the sale of properties situated in Urban Rehabilitation Area, recovered in accordance with the respective rehabilitation strategies.

Property income earned by IRS taxpayers residing in Portuguese territory is taxed at a rate of 5%, without prejudice to the option for incorporation, when they are entirely due to the rental of:

1. Real estate located in the Area of Urban Rehabilitation recovered in accordance with the respective strategies of rehabilitation;
2. Rented properties subject to phased updating of rentals under the terms of articles 27^th and subsequent of the NRAU, which are subject to rehabilitation actions.

In order to benefit from the incentives provided for in article 71^st of the Tax Benefits Statute, you should consider the following information:

It is the City Council’s responsibility to verify the state of conservation of the property before and after performing the rehabilitation action. The request for granting conservation status must be submitted before the start of the rehabilitation action, and a new request must be formalized upon completion.

Retired Persons and Foreign Assets or Portuguese Immigrants who change their tax residence to Portugal may acquire the Non-Habitual Resident Status, provided they spend at least 183 days per year or have a main residence in Portugal on 31^st December of the previous year , as well as not having declared IRS in the last 5 years in Portugal.

One can benefit from this Non-Habitual Resident status for 10 years, profiting from::

- Exemption from income tax in the case of the Reformed;

- Maximum tax of 20% on the IRS for the Assets.

It is important to note that there is no double taxation on income due to fiscal agreements between countries in the European area.

As a strategy of boosting and invigorate the real estate market in Portugal, the Portuguese Government agreed to provide a set of tax benefits aimed mainly at Promotors, Developers, Real Estate investors and at purchasers of final products, of which we highlight:

Pursuant to Article 45^th of the Fiscal Benefits Statute (EBF), purchases of urban buildings for urban rehabilitation are exempt from IMT, provided that the purchaser commences its urban rehabilitation works within three years of the acquisition . It is an exemption which operates by reimbursement, that is to say, the amount paid as a tax; The acquisition of rehabilitated properties, pursuant to article 71^st of the EBF, is also exempt from IMT, provided that:

1. It is exclusively destined to own housing and permanent residence;
2. If it is the first onerous transmission of the rehabilitated building or fraction;
3. The property is located in "urban rehabilitation area" or is urban leased buildings that can be staggered annually in accordance with articles 27^th and subsequent of the New Urban Lease Regime;
4. The Urban rehabilitation started after January the 1^st 2008 and is completed by December the 31^st 2020.

Pursuant to article 45^th of the EBF, urban buildings subject to urban rehabilitation are exempt from Municipal Property Tax (IMI) for a period of three years counting from the year in which the building permit was issued.

The exemption shall only apply if the requirements referred to in point 2.1 above have been fulfilled. Meaning: (i) the work must be included in the definition of urban rehabilitation; (ii) energy rating equal to or greater than or attribution of energy class higher than previously certified, by at least two levels; and (iii) recognition of the exemption by the competent entity, usually, the Municipality of the area of the property.

Accordingly to Article 71^st, the acquisition of rehabilitated properties is exempt from IMI for a period of five years from the year in which the rehabilitation was completed. It is possible to renew the exemption for an additional period of five years.

Urban rehabilitation works are subject to a reduced rate of Value Added Tax (VAT) of 6%, provided that:

1. It is an urban rehabilitation project, that is to say, the form of integrated intervention on the existing urban fabric, where the urban and real estate heritage is maintained, in its whole or partially, and modernized by carrying out remodeling or improvement works of urban infrastructure systems, equipment and urban or green spaces for collective use and construction, reconstruction, expansion, alteration, conservation or demolition of buildings, as defined in the Legal Regime of Urban Rehabilitation (DL n.º 307 / 2009, of October the 23^rd);
2. A works contract has been signed;
3. The property is located in Urban Rehabilitation Area

Income, of any nature, obtained by Real Estate Investment Funds, pursuant to article 71^st of the EBF, shall be exempt from IRC, provided that:

1. Have been set up between January the 1^st 2008 and December the 31^st 2013;
2. At least 75% of its assets are real estate property subject to rehabilitation actions carried out in the areas of urban rehabilitation.

Income relating to units of investment funds referred to in the preceding paragraph, paid or made available to the respective holders, whether by distribution or through a redemption operation, shall be subject to IRS withholding tax or IRC at the rate of 10% (with the exceptions provided in the EBF).

Capital gains earned by taxpayers resident in Portuguese territory are taxed at an autonomous rate of 5%, without prejudice to the option for incorporation, when they are entirely due to the sale of properties situated in Urban Rehabilitation Area, recovered in accordance with the respective rehabilitation strategies.

Property income earned by IRS taxpayers residing in Portuguese territory is taxed at a rate of 5%, without prejudice to the option for incorporation, when they are entirely due to the rental of:

1. Real estate located in the Area of Urban Rehabilitation recovered in accordance with the respective strategies of rehabilitation;
2. Rented properties subject to phased updating of rentals under the terms of articles 27^th and subsequent of the NRAU, which are subject to rehabilitation actions.

In order to benefit from the incentives provided for in article 71^st of the Tax Benefits Statute, you should consider the following information:

It is the City Council’s responsibility to verify the state of conservation of the property before and after performing the rehabilitation action. The request for granting conservation status must be submitted before the start of the rehabilitation action, and a new request must be formalized upon completion.

Retired Persons and Foreign Assets or Portuguese Immigrants who change their tax residence to Portugal may acquire the Non-Habitual Resident Status, provided they spend at least 183 days per year or have a main residence in Portugal on 31^st December of the previous year , as well as not having declared IRS in the last 5 years in Portugal.

One can benefit from this Non-Habitual Resident status for 10 years, profiting from::

- Exemption from income tax in the case of the Reformed;

- Maximum tax of 20% on the IRS for the Assets.

It is important to note that there is no double taxation on income due to fiscal agreements between countries in the European area.

As a strategy of boosting and invigorate the real estate market in Portugal, the Portuguese Government agreed to provide a set of tax benefits aimed mainly at Promotors, Developers, Real Estate investors and at purchasers of final products, of which we highlight:

Pursuant to Article 45^th of the Fiscal Benefits Statute (EBF), purchases of urban buildings for urban rehabilitation are exempt from IMT, provided that the purchaser commences its urban rehabilitation works within three years of the acquisition . It is an exemption which operates by reimbursement, that is to say, the amount paid as a tax; The acquisition of rehabilitated properties, pursuant to article 71^st of the EBF, is also exempt from IMT, provided that:

1. It is exclusively destined to own housing and permanent residence;
2. If it is the first onerous transmission of the rehabilitated building or fraction;
3. The property is located in "urban rehabilitation area" or is urban leased buildings that can be staggered annually in accordance with articles 27^th and subsequent of the New Urban Lease Regime;
4. The Urban rehabilitation started after January the 1^st 2008 and is completed by December the 31^st 2020.

Pursuant to article 45^th of the EBF, urban buildings subject to urban rehabilitation are exempt from Municipal Property Tax (IMI) for a period of three years counting from the year in which the building permit was issued.

The exemption shall only apply if the requirements referred to in point 2.1 above have been fulfilled. Meaning: (i) the work must be included in the definition of urban rehabilitation; (ii) energy rating equal to or greater than or attribution of energy class higher than previously certified, by at least two levels; and (iii) recognition of the exemption by the competent entity, usually, the Municipality of the area of the property.

Accordingly to Article 71^st, the acquisition of rehabilitated properties is exempt from IMI for a period of five years from the year in which the rehabilitation was completed. It is possible to renew the exemption for an additional period of five years.

Urban rehabilitation works are subject to a reduced rate of Value Added Tax (VAT) of 6%, provided that:

1. It is an urban rehabilitation project, that is to say, the form of integrated intervention on the existing urban fabric, where the urban and real estate heritage is maintained, in its whole or partially, and modernized by carrying out remodeling or improvement works of urban infrastructure systems, equipment and urban or green spaces for collective use and construction, reconstruction, expansion, alteration, conservation or demolition of buildings, as defined in the Legal Regime of Urban Rehabilitation (DL n.º 307 / 2009, of October the 23^rd);
2. A works contract has been signed;
3. The property is located in Urban Rehabilitation Area

Income, of any nature, obtained by Real Estate Investment Funds, pursuant to article 71^st of the EBF, shall be exempt from IRC, provided that:

1. Have been set up between January the 1^st 2008 and December the 31^st 2013;
2. At least 75% of its assets are real estate property subject to rehabilitation actions carried out in the areas of urban rehabilitation.

Income relating to units of investment funds referred to in the preceding paragraph, paid or made available to the respective holders, whether by distribution or through a redemption operation, shall be subject to IRS withholding tax or IRC at the rate of 10% (with the exceptions provided in the EBF).

Capital gains earned by taxpayers resident in Portuguese territory are taxed at an autonomous rate of 5%, without prejudice to the option for incorporation, when they are entirely due to the sale of properties situated in Urban Rehabilitation Area, recovered in accordance with the respective rehabilitation strategies.

Property income earned by IRS taxpayers residing in Portuguese territory is taxed at a rate of 5%, without prejudice to the option for incorporation, when they are entirely due to the rental of:

1. Real estate located in the Area of Urban Rehabilitation recovered in accordance with the respective strategies of rehabilitation;
2. Rented properties subject to phased updating of rentals under the terms of articles 27^th and subsequent of the NRAU, which are subject to rehabilitation actions.

In order to benefit from the incentives provided for in article 71^st of the Tax Benefits Statute, you should consider the following information:

It is the City Council’s responsibility to verify the state of conservation of the property before and after performing the rehabilitation action. The request for granting conservation status must be submitted before the start of the rehabilitation action, and a new request must be formalized upon completion.

Retired Persons and Foreign Assets or Portuguese Immigrants who change their tax residence to Portugal may acquire the Non-Habitual Resident Status, provided they spend at least 183 days per year or have a main residence in Portugal on 31^st December of the previous year , as well as not having declared IRS in the last 5 years in Portugal.

One can benefit from this Non-Habitual Resident status for 10 years, profiting from::

- Exemption from income tax in the case of the Reformed;

- Maximum tax of 20% on the IRS for the Assets.

It is important to note that there is no double taxation on income due to fiscal agreements between countries in the European area.