Property Taxation

TAX ON PROPERTY IN PORTUGAL- CHARGES

Upon the acquisition of real estate in Portugal, the investor will have to bear the following costs, related to the purchase:

Municipal Property Transfer Tax (“IMT” - Imposto Municipal sobre Transmissões Onerosas de Imóveis )

Property transfer tax is paid prior to completion of the final purchase and sale agreement. Upon your payment,the proof of payment;is issued by the Tax Authority. The payable tax is calculated on the value stated in the act/the contract, or on the taxable value of the property, appearing in the official tax document (caderneta predial):

  • Urban buildings for permanent residence purposes - a progressive rate of 6% - 6.5% is applicable for property worth more than € 500,000;

  • Urban buildings for commercial purposes or land for construction — 6,5%

  • Rustic building (without building permit) — 5%.

Stamp Duty (“IS” - Imposto do Selo)

In the deed signing ceremony or final purchase and sale contract, the buyer must pay the stamp duty, the amount of which varies depending on the act or contract. For the acquisition of real estate, the tax is paid at the rate of 0.8%.

Municipal Property Tax (“IMI” - Imposto Municipal sobre Imóveis)

Tax payable by the owner of the property on 31 December of the respective year; IMI focuses on the taxable value of the property at a rate ranging from 0.3% to 0.5% (annually fixed by the respective municipality) and 0.8% for rural properties;

Notary Fees and Registration

The notary and registration fees are paid by the buyer on the deed signature act or final purchase and sale contract