Engel & Völkers
  • 2 min read

Invest in renovation properties in historic town centre

Investing in renovation properties in historic town centres can be highly beneficial. In this article, find out the main advantages of buying a renovation home in central Lisbon.

Historic centres are making a come back thanks to their attractive points of interest, stunning beauty, and history. These city locations are excellent to live or invest in.

The renovation projects that have been carried out in these locations have proven how the old properties can be transformed into modern homes. With fully preserved exteriors, these properties have been converted into modern palaces inside, while allowing you to take advantage of the best location, the most comfortable home and the best investment benefits.

Property remodelling is becoming popular today… and there are several reasons for this. Today we will explore why it is worth investing in renovation homes in the historic centres, especially in Lisbon's old town.

1. Great demand for houses in Lisbon

While talking about new property constructions, to respond to this great demand for houses to rent or buy, the city councils are thinking of alternatives to improve the housing shortages.

The benefits that support renovation projects in places, such as the historic centres, appear as an excellent investment opportunity for those looking for a home in the capital or those who wish to take advantage of the current demand in the rental market.

2. Support programmes for rehabilitation of buildings in historic centres

Currently there is no shortage of programmes aimed at rehabilitation of buildings and one of them is IFRRU 2020, which is part of the urban regeneration project. It allows individuals or companies to apply for complete rehabilitation of buildings that are 30 years or older and located in places, such as historic centres.

In addition, these support programmes also offer up to 50% financing with short-term loans if the property is to be rented out.

In Lisbon, we can also find the “Rehabilitate First, Pay Later” programme, which is intended for investors who want to rent out the properties - including those in the historic centre - and the payment must be made by the end of the renovation project, once all the legal procedures and the subsequent marketing of the property have finalised.

3. Tax benefits

In addition to the mentioned programmes, there are several tax benefits that support investment in such properties.

Some of these tax benefits include an exemption from paying the Municipal Property Tax (IMI) which can be from 3 to 5 years; and the exemption from paying the Municipal Tax on Real Estate Transfer (IMT).

If you decide to renovate a building in the historic area of town, you will also be entitled to a 50% reduction in the Public Domain Occupancy Rate (TODO) during the first 4 months. In addition, the rehabilitation of real estate also exempts the payment of the Administrative Fee.

Those who choose to invest in such projects in the historic centre will still be entitled to a VAT reduction, which is currently 6%.

The current situation as far as great demand is concerned, together with the combination of government programmes and tax benefits, create a very positive investment environment for those wishing to invest in the remodelling and rehabilitation of buildings located in the historic centres of cities.

Of course, if this is the case for you, you should remember that there are several agencies available to help you with the decision making process and to give you all the information you need to ensure that you invest your money to the best of your ability and make the most of your investment in a timely manner and shorter period of time.

If you want to find the right property to renovate in central Lisbon, you will have the advantage of finding highly professional and competent agents to help you with this task. Engel & Völkers' expertise, for example, along with its extensive knowledge of the market, will ensure that you find the most advantageous option when looking for renovation properties. Be sure to contact the agency to find out your best options.

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Engel & Völkers Portugal

Av. da Liberdade 196, 7 andar

1250-096 Lisboa, Portugal

Tel: +351 210 200 490