English speaking accountants in Portugal

Property Taxes (IMI and IMT)

Property Taxes (IMI and IMT)

 

In Portugal there are two principal taxes relating to property: Imposto Municipal sobre as Transmissões Onerosas de Imóveis (IMT), which is generally payable when Portuguese property is acquired for consideration, and Imposto Municipal sobre Imóveis (IMI), which is an annual tax on the ownership of Portuguese property.

Stamp Duty (Imposto do Selo) may also be payable on certain property transactions, including the acquisition of property.

 

IMT – Municipal Property Transfer Tax

IMT is generally payable by the purchaser on the acquisition of Portuguese immovable property or certain rights over property.

The tax is generally calculated by reference to the higher of the purchase price and the property's Tax Registration Value (Valor Patrimonial Tributário or VPT), subject to the specific valuation rules contained in the IMT legislation.

The rates applicable depend on the type of property and, for residential property, whether the property is intended to be the purchaser's own permanent residence.

 

Residential property – mainland Portugal

For 2026, the IMT rates applicable to the acquisition of a residential property intended exclusively as the purchaser's own permanent residence are:

* The 6% and 7.5% rates are single rates rather than marginal rates.

The lower bands operate under the progressive IMT system, with the applicable average rate and deduction mechanism determining the final tax payable. (info.portaldasfinancas.gov.pt)

For residential property not intended as the purchaser's own permanent residence, the 2026 rates are:

* Single rates apply above the relevant threshold. (info.portaldasfinancas.gov.pt)

The thresholds above apply to mainland Portugal. Different thresholds and rates apply in the Autonomous Regions of Madeira and the Azores.

 

Other property

The acquisition of rural property is generally subject to IMT at 5%.

The acquisition of other urban property and other chargeable acquisitions is generally subject to IMT at 6.5%. (info.portaldasfinancas.gov.pt)

Young persons purchasing their first permanent residence

Individuals aged 35 or under may qualify for a significant exemption from IMT when purchasing their first home for their own permanent residence.

Subject to the statutory conditions, the exemption applies to the first acquisition of a residential property intended exclusively as the purchaser's permanent residence.

For 2026, the full exemption applies where the value used for IMT purposes does not exceed €330,539 in mainland Portugal.

For properties above the full-exemption threshold, special rates apply to the qualifying acquisition. The purchaser must satisfy various conditions, including conditions relating to age, previous ownership of residential property and dependency for Portuguese IRS purposes. (info.portaldasfinancas.gov.pt)

 

Acquisition of companies owning Portuguese property

In certain circumstances, the acquisition of shares or quotas in a company can be treated as an acquisition of immovable property for IMT purposes.

This can apply where:

• more than 50% of the company's assets, directly or indirectly, consist of Portuguese immovable property;
• the property is not directly used in an agricultural, industrial or commercial activity, excluding property trading activities; and
• as a result of the acquisition, amortisation or other event, a shareholder comes to hold at least 75% of the company's share capital, or the number of shareholders is reduced to two married or civil-partnered persons.

The rules are therefore more specific than simply stating that the acquisition of more than 75% of a company automatically gives rise to IMT. (info.portaldasfinancas.gov.pt)

Similar rules can apply to certain acquisitions of units in closed-end private real estate investment funds. (info.portaldasfinancas.gov.pt)

 

Other transactions subject to IMT

IMT can apply to a number of transactions in addition to an ordinary purchase and sale of property.

These can include certain:

• exchanges of property;
• acquisitions of partial rights in property;
• long-term leases and subleases exceeding 30 years;
• contributions of property to companies;
• distributions or allocations of property to shareholders on the liquidation of certain companies;
• certain divisions and partitions of property;
• acquisitions arising from certain contractual arrangements; and
• transfers of certain inheritance interests.

 

The precise rules depend on the nature of the transaction.

It is therefore preferable not to describe inheritance itself as generally subject to IMT. Transfers on death are principally dealt with under the Stamp Duty rules, although particular transactions involving inheritance rights or subsequent partition and transfer of property can give rise to IMT. (info.portaldasfinancas.gov.pt)

 

IMT exemptions

There are a number of exemptions and special regimes under Portuguese law.

These include, subject to the relevant conditions:

• certain acquisitions of properties classified as being of national, public or municipal interest;
• qualifying acquisitions by property companies where the property is acquired for resale;
• certain acquisitions connected with approved urban rehabilitation