Real Estate Tax in Portugal

IMT (Imposto Municipal sobre Transmissões Onerosas de Imóveis) is a one-time transfer tax paid by the buyer. It applies to all property acquisitions and is calculated on the higher of the purchase price or the property's tax valuation.

IMT Rates for Primary Residence (check current-year table) Property Value Rate Up to €104,261 0% (exempt) €104,261 – €142,618 2% €142,618 – €242,629 5% €242,629 – €648,022 7% €648,022 – €1,128,287 6% (flat) Above €1,128,287 7.5% (flat) Exemptions for Primary Residence Buyers under 35 purchasing a first qualifying home may benefit from IMT and stamp-duty relief under specific legal thresholds and conditions in force for the acquisition year.

First-home relief can apply for eligible buyers under current legal thresholds. Confirm the acquisition-year limits before signing. Secondary Residence and Non-Residential Property Secondary homes (rental properties) face rates of 1–8%, depending on value bands. Commercial properties carry a flat 6.5% rate. Land is taxed at 6.5% for urban land and 5% for rural land.

Non-Resident Treatment Non-resident IMT treatment depends on property type, use, and current legal tables. Confirm applicable rates for the acquisition year. Stamp Duty on Purchase Imposto do Selo (stamp duty) adds 0.8% to the purchase price. This applies to all transactions unless the buyer qualifies for a first-property exemption.

IMI (Imposto Municipal sobre Imóveis) is an annual municipal property tax paid by the owner each year. This tax funds local services, infrastructure, and public administration.

Annual IMI Rates Urban properties: 0.3% to 0.45%, depending on municipality Rural properties: 0.8% fixed rate Lisbon (most parishes): 0.3% Porto: 0.324% (varies by parish) How IMI is Calculated IMI = VPT (Valor Patrimonial Tributário) × Municipal Rate The VPT is the taxable property value, determined by the tax administration using government-published coefficients.

The municipality sets the final IMI rate within the legal range. Example: A property with a VPT of €250,000 in Lisbon (0.3% rate) incurs €750 annual IMI. VPT Reassessment and Updates VPT values are periodically updated based on market conditions and government coefficients. Property owners receive official valuation notices.

If you disagree with the valuation, you may submit a formal objection to the municipality. Payment Schedule IMI bills are issued in April each year. Payment is typically due by August 31. Late payment incurs penalties and interest. Exemptions Properties classified as your permanent residence may qualify for reduced rates or exemptions in certain circumstances.

Some municipalities offer targeted exemptions for senior citizens or low-income residents. Contact your local municipal tax office (Finanças) for eligibility.

AIMI (Adicional ao Imposto Municipal sobre Imóveis) is an additional wealth tax on high-value property portfolios. Both residents and non-residents may need to pay AIMI if holdings exceed specified thresholds.

Thresholds for AIMI (2025) Individuals: €600,000 total VPT Married couples (joint taxation): €1,200,000 combined VPT Companies: No threshold; all properties subject to AIMI AIMI Tax Rates Portfolio Value Individual Rate Company Rate €600,000 – €1,000,000 0.7% 0.4% €1,000,000 – €1,500,000 0.7% 0.4% Above €1,500,000 1% 0.4% Married Couple Optimization Married couples choosing joint taxation can hold up to €1,200,000 VPT at the 0.7% rate, effectively doubling the initial threshold.

This joint regime produces identical tax to separate individual taxation, making it a neutral but often administratively simpler choice. Company Ownership Advantage Companies pay a flat 0.4% AIMI rate regardless of portfolio size. For portfolios exceeding €1,500,000, company ownership saves substantially on AIMI. However, companies incur higher formation, compliance, and accounting costs.

Payment Deadline AIMI is calculated in June based on property ownership as of January 1. The tax bill arrives in June, with payment due by September 30.

Stamp duty of 0.8% applies to most property purchases and is paid by the buyer. This is a one-time cost separate from IMT. First-Property Exemptions Under-35 first-home buyers can qualify for stamp-duty relief when statutory conditions are met; confirm thresholds and eligibility in the transaction year.

Mortgage Stamp Duty If you obtain a mortgage loan to purchase the property, an additional stamp duty of 0.8% applies to the loan amount itself. This is typically paid by the lender or split between buyer and lender based on the contract.

When you sell Portuguese real estate, profits are subject to income tax. The treatment differs for residents versus non-residents, but both benefit from the same 50% inclusion rule as of 2023. Tax Treatment (Residents and Non-Residents) Capital-gains inclusion and final rate depend on residency status, asset type, and the current legal framework. Use current-year rules when calculating liability.

Example: If you sell a property for €100,000 more than you paid, only €50,000 is subject to income tax. Calculating the Gain Capital Gain = Sale Price – Purchase Price – Documentation Costs – Renovation Costs (within 12 years) You may deduct documented renovation and improvement costs incurred in the 12 years before sale, provided invoices are under your tax number.

Exemptions and Relief Properties purchased before January 1, 1989 are completely exempt from capital gains tax. For properties held over 2 years, an inflation adjustment coefficient reduces the taxable gain based on the cumulative inflation rate since purchase. Reinvestment Exemption Portuguese tax residents may qualify for a reinvestment exemption if they purchase another property in Portugal within specified timeframes.

This exemption does not apply to non-residents. Non-Resident Considerations Non-residents calculate capital gains on worldwide income when determining the applicable tax rate. Non-residents typically may not use the reinvestment exemption.

Individual Ownership

Advantages

• Lower setup and compliance overhead.
• Simpler transfer and annual administration.

Trade-offs

• Higher exposure to progressive wealth-style layers on larger portfolios.
• Less flexibility for group structures and succession planning.

Company Ownership

Advantages

• Can improve structure, governance, and transfer planning for larger portfolios.
• May reduce friction for multi-asset management.

Trade-offs

• Higher annual accounting, filing, and governance obligations.
• Additional corporate-layer tax and compliance analysis required.

Model total cost across IMT, IMI/AIMI, CIT, accounting, and exit tax before deciding.

Portfolio Governance Standards

For multi-asset owners, tax quality depends on standardization. Use one data structure across all properties: acquisition facts, annual cost records, material improvements, and exit assumptions. This improves decision speed and lowers filing risk.

At minimum, maintain quarterly reviews for each asset: verify record completeness, update scenario assumptions, and document any planned transaction changes. If a sale or refinance is expected, start pre-transaction checks early.

• Apply one evidence template across all properties.
• Use quarterly governance reviews, not ad-hoc updates.
• Record rationale for all structural decisions.

This converts isolated transactions into a controlled portfolio process.