More Housing Program: Tax authorities’ clarification on purchase for resale

Law 56/2023 of October 6, also known as the “More Housing Law,” amended the property transfer tax (IMT) exemption regime for the purchase of real estate for resale, as established in article 7 of the Municipal Property Transfer Tax Code (“CIMT”). One of the most significant amendments was the reduction of the resale period from three years to one year without losing the exemption right. However, the absence of transitional provisions in the law created uncertainty regarding the date from which this amendment would start applying.

Based on the doctrinal sheets that the tax authorities released on February 15, 2024, we can conclude that the tax authorities’ understanding is that the new wording of article 7.4 of the CIMT—stipulating the shorter resale period—only applies to purchases of real estate for resale made from October 7, 2023, the date Law 56/2023 entered into force.

Therefore, for purchases of real estate for resale made before October 7, 2023, the three-year resale period still applies, and the tax benefit will not be lost, provided all other applicable legal requirements are met.

For more information on the More Housing Program, see Practical Guide: More Housing Program.