The taxes you should consider when buying property in Portugal

1. Municipal Tax on Onerous Transfers of Real Estate (IMT)

IMT is one of the main taxes applied to the purchase of real estate in Portugal. The amount of this tax depends on the type of property (urban or rustic), the use (own and permanent or secondary residence) and the acquisition price or taxable patrimonial value (the higher of both). Fees vary according to these conditions and can range from 0% to 8%, depending on the amount involved.

When purchasing a property in Portugal, you should consider the IMT, which is calculated based on the purchase value or the taxable asset value of the property, whichever is higher. The fee varies between 1% and 8%, depending on the type and value of the property.

In 2024, however, young people under the age of 35 who buy their first home will be able to benefit from a total IMT exemption for properties up to €316,772. For properties between €316,772 and €633,453, a partial exemption applies, providing significant tax savings. This measure was created to encourage young people to enter the real estate market and become owners earlier.

In addition, properties intended for urban rehabilitation or located in rehabilitation areas may also be exempt from IMT.

2. Stamp Duty

Stamp Duty is mandatory in all real estate transactions and corresponds to 0.8% of the purchase value of the property. This tax is paid in one lump sum at the time of purchase and must be factored into the total budget.

3. Municipal Property Tax (IMI)

IMI is an annual tax levied on property owners in Portugal. The IMI rate varies between 0.3% and 0.45% on the taxable patrimonial value of the property, depending on the municipality where it is located. Some metropolitan areas may have slightly higher rates.

It is important to mention that there are temporary IMI exemptions for homebuyers, which can go up to three years, depending on the value of the property.

4. Capital Gains

If you buy a property as an investment and want to sell it later, you should consider capital gains tax. This tax is levied on the difference between the sale price and the purchase price, minus the associated expenses (such as works and notarial costs). For tax residents in Portugal, capital gains are taxed at a rate of 28% (for non-residents), or only 50% of capital gains are considered in the case of residents

5. Other Associated Costs

In addition to direct taxes, there are other costs to consider, such as property registration fees and notarial fees. Although they are not taxes per se, they are expenses that are part of the purchase process and must be included in the total calculation.

Unmissable Opportunity for Youth! 

Discover your new home! This charming property is available at a price that qualifies for the IMT exemption for young people up to 35 years old. With a modern design and located in a vibrant area, this is the perfect opportunity to invest in your future. Don't miss the chance to live in a space that combines comfort and style, without the added costs of tax. Schedule a visit today and come see your new home!