Introduction: A New Cycle for the Construction Industry and the Property Market in Cape Verde
Cape Verde is undergoing a period of rapid transformation in the construction and property sectors. With GDP growth of 7.31% in Q3 2024 and 18 million tourists visiting the country, the archipelago has consolidated its position as a prime destination for property investment in the Atlantic.
The opening of the TechPark CV In May 2025, an investment of €51.85 million, backed by the African Development Bank, will further bolster confidence in the country’s infrastructure development.
For those working in the construction sector, for estate agents and property developers, and, in particular, for investors from the diaspora who wish to build or buy property in Cape Verde, 2026 brought structural changes that you need to be aware of. The property tax reform, the simplification of licensing procedures set out in the State Budget, and the new rules on property taxation are completely transforming the way business is conducted in the sector.
In this article, we explain, based on official sources, what has changed, how to obtain planning permission in 2026, and how these changes create tangible opportunities for those looking to invest.
Contents
The licensing of building works in Cape Verde continues to be governed by Decree-Law No. 18/2011 of 28 February, which sets out the legal framework for licensing, inspection and compliance with town planning and building regulations. This legislation remains a key reference for any construction project, ranging from single-family homes to large-scale tourist developments.
Licensing is also linked to the National Plan for Spatial Planning and Urban Development (PNOTU), which sets out the rules governing land use, the instruments for land-use planning and the building regulations for each island. For estate agents and developers, this means that Any project must comply with the municipal regulations, in particular the detailed plans and zoning regulations approved by the local councils.
To operate legally in the construction sector, whether as a construction company or a property developer, you must obtain the following licences:
| Type of Licence | Issuing Authority | Key Requirements |
|---|---|---|
| Planning permission / Building permit | Town Council | Architectural plans, compliance with zoning regulations, environmental impact report where applicable |
| Licence Agreement | Town Council | Final inspection of the works, confirmation of compliance with the approved design |
| Building permit | Relevant municipal authorities | Submission of the construction plans, land registry certificate, payment of fees |
| Commercial/industrial licence | Ministry of Industry, Trade and Energy | For construction companies and the building materials industry |
The big news for 2026, as set out in the State Budget, is the streamlining and digitisation of the licensing process, which is expected to reduce approval times and facilitate the electronic submission of documentation.
The most significant change for estate agents, property developers and investors in 2026 is the entry into force, on 1 January, of two new tax laws that have revolutionised property taxation in Cape Verde:
Both repealed the old one Single Property Tax (IUP), which had been in force since 1998 and was no longer in line with current economic and property market conditions.
O Property Transfer Tax (ITI) applies to transfers, whether for consideration or free of charge, of immovable property situated within the national territory. It is a local tax, the revenue from which goes directly to local authorities.
| Appearance | Rule in 2026 |
|---|---|
| Reference rate | 1% on the book value recorded in the register |
| Taxable person | Purchaser of the property (as a rule) |
| Wider scope | This includes traditional forward contracts, assignments of contractual positions and irrevocable powers of attorney for the purpose of transfer |
| Exemptions | The State and local authorities; credit institutions involved in enforcement proceedings; buildings classified as national monuments; the possibility of municipal exemptions for strategic development projects |
For estate agents, this change is crucial: transactions that were previously not subject to tax, such as certain transfers of contractual positions, are now subject to ITI, which calls for greater caution when structuring business deals.
O Property Tax (IPI) replaces the annual component of the former IUP and represents a significant reduction in the tax burden for the vast majority of property owners.
| Situation | Previously (IUP) | Now (IPI) |
|---|---|---|
| Annual base rate | 1.51 times the book value | 0.11% of the equity value |
| Vacant or derelict buildings | Standard rate | 25% (aggravating factor) (+ 201 full-time and 3 part-time positions per year) |
| Buildings with unfinished façades | Standard rate | 10% (aggravation) |
| Assessment | Figures that are often out of date | Objective assessment by Municipal Assessment Committees |
Practical example: an apartment with a property value of 5,085,503 CVE will pay around 4,322 CVE in annual IPI, compared with the 26,227 CVE it would have paid under the old IUP. A saving of over 80%.
O State Budget for 2026 establishes a structural programme to promote access to housing, which has a direct impact on the construction industry and the work of estate agents.
| Measure | Details | Beneficiary |
|---|---|---|
| State guarantees | Mortgage scheme for young people aged up to 35 | Young buyers |
| Interest subsidy | Up to 55% for the interest rate under the youth subsidy scheme; up to 50% under the general subsidy scheme | First-time buyers and expats |
| Affordable housing | Tax incentives for construction and sales: investment tax credit, exemption from IPI (formerly IUP), stamp duty exemption, reduction in the DI rate | Property developers |
| Exemption from notary and registration fees | For purchase, construction, refurbishment and letting | Natural persons |
| Stamp duty exemption on financing | When taking out a mortgage | Buyers |
| Increase in the income tax deduction | Increase in the deduction limit for rent and mortgage costs | Taxpayers with income from employment |
| Simplification of the licensing process | Digitisation and streamlining of building approval processes | Developers and builders |
For estate agents and developers, these measures mean expected increase in demand, particularly in the affordable housing sector and the rental market, areas where there has historically been a shortage in Cape Verde.
Although there is no specific legislation establishing a new professional licence for estate agents, the The regulatory and fiscal landscape in 2026 calls for a new approach for those operating in the market:
The complexity of the new ITI Code means that estate agents must understand the new tax arrangements. An assignment of a contractual position or a preliminary sale and purchase agreement with early transfer of title may give rise to unexpected tax liabilities for the client. An agent who does not master these rules runs the risk of civil liability and loses credibility.
With the introduction of the IPI tax, the certificate issued by the local council has become an essential document in any transaction. The buyer must confirm that the property has no outstanding IPI tax liabilities and is not classified as derelict or in ruins, as these circumstances result in surcharges of 25% or more.
The estate agent must ensure that the property has:
The estate agency contract must clearly set out the agent’s obligations, particularly regarding the verification of legal documentation and informing the buyer about the new ITI and IPI taxes. S&D Consultoria recommends that estate agents work in partnership with solicitors and certified accountants to ensure the transaction is fully compliant.
For investors from the diaspora or local entrepreneurs wishing to build, the process retains the structure of Decree-Law No. 18/2011, but with the simplification measures set out in the 2026 State Budget:
A dematerialisation provided for in the 2026 State Budget This should soon enable the electronic submission of most of this documentation, reducing waiting times and the need to visit local council offices.
If you live abroad and are looking to invest in the construction or property market in Cape Verde, 2026 offers exceptional opportunities:
At present, there is no specific, exclusive professional licence for estate agents, but the activity must be carried out through a legally incorporated company with a valid business licence and in compliance with the provisions of the Labour Code and tax legislation. S&D Consultoria advises setting up a commercial company for this purpose.
O ITI is paid once, at the time of buying or selling the property. The IPI It is an annual tax, payable by the owner, at a basic rate of 0.11% of the property’s assessed value.
Yes. The IPI provides for a surcharge of 25% on vacant or derelict buildings, with an additional 20% per year, up to a maximum of 100%. This is intended to combat property speculation and urban neglect.
Yes, but you will need to set up a local company or engage a qualified developer/builder, as well as ensuring you have tax and legal representation in the country. S&D Consultoria provides this comprehensive support.
The licensing of building works continues to be governed by Decree-Law No. 18/2011. The major change in 2026 concerns property taxation (ITI and IPI) and the housing incentives provided for in the 2026 State Budget. Construction projects already underway must comply with the regulations in force at the time of licensing.
Here is the Practical Guide to the Construction Industry in Cape Verde:
S&D CONSULTING_PRACTICAL_GUIDE 2026_Construction & Real Estate in Cape Verde_EN
S&D CONSULTING_PRACTICAL_GUIDE 2026_Construction & Real Estate in Cape Verde_FR
The construction and property sectors in Cape Verde are undergoing a period of profound modernisation. The tax reform that replaced the IUP with the ITI and the IPI, combined with the housing programme in the 2026 State Budget and the simplification of licensing procedures, creates a more transparent, fairer and more attractive environment for investors.
For estate agents, developers and investors from the diaspora, success depends on master these new rules before the competition. Anyone who operates without being aware of the new ITI Code, who ignores the increased IPI rates for vacant properties, or who fails to take advantage of the tax incentives for housing will be missing out on money and opportunities.
A S&D Consultancy is an accounting, tax and investment consultancy firm based in Cape Verde, operating nationwide and specialising in supporting entrepreneurs and investors from the diaspora.
Our services for the construction and property sector include:
Não deixe o seu investimento imobiliário exposto a riscos fiscais ou legais. Contacte a S&D Consultoria e agende uma consulta estratégica para o seu projeto em Cabo Verde.
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