IMT exemption for young people under 35 years old

IMT and Stamp Duty Exemption for Young People up to 35 Years Old: What Has Changed with DL 48-A/2024?

The recent Decree-Law 48-A/2024, published on July 25, 2024, brought significant changes for young people who want to buy their first home. This legal diploma introduces an exemption from Municipal Property Transfer Tax (IMT) and Stamp Duty for people under 35 years of age, provided that they meet certain conditions. Below, we summarize the main points of this new legislation.

Who Can Benefit from the Exemption?

• Age: Young people up to 35 years old on the date of the deed of purchase and sale of the property.
• Financial Independence: In the year of acquisition, the beneficiary cannot be considered a dependent for IRS purposes.

Who Can Benefit from the Exemption?

Not all young people who meet the above criteria will be able to benefit from the exemption. The legislation establishes some important restrictions:

• Previous Property: Those who hold any property right, or a partial figure of such right (e.g. usufruct), over an urban residential property on the date of transfer or in the previous three years cannot benefit from the exemption.
• Value Limit: The exemption applies to properties up to the value of 316,772 euros. For properties between 316,772 euros and 633,453 euros, the exemption is partial, with an IMT rate of 8% being applied on the excess. Above 633,453 euros, there is no exemption from IMT or Stamp Duty.

Application Conditions

• Permanent Own Housing: The property acquired must be intended exclusively for the young person's own and permanent residence.
• First Acquisition: The exemption applies only to the first acquisition of a property by the young beneficiary. This property can be a stand-alone fraction or an urban building in full ownership (such as a villa).

Couples

In cases where the purchase is made by a couple, the requirements for the exemption are checked individually for each element, in equal parts.

Exclusions and Loss of Exemption

• Date of Deed: Properties acquired with a deed executed before August 1, 2024 are not covered by the exemption.
• Assignment of Contractual Position: The exemption does not apply to the IMT due for the assignment of contractual position.
• Change of Destination of the Property: If, within six years after the acquisition, the property is no longer used as its own and permanent residence, the beneficiary may lose the exemption and be required to return the corresponding amount.

Exceptions

There are, however, exceptions that allow the exemption to be maintained, even with the change of destination of the property:

• Sale of the property;
• Change in the composition of the household, provided that the property continues to be used for housing;
• Change of workplace to more than 100 km away, as long as the property remains intended for housing;
• If the beneficiary is considered a dependent for IRS purposes during the six years after the acquisition.

Conclusion

DL 48-A/2024 brings a valuable opportunity for young people who want to acquire their first home. However, it is essential to be aware of the conditions and restrictions imposed by the legislation to avoid surprises and ensure full enjoyment of tax benefits.