Property Taxes and Related Topics

Information about the taxes incurred when buying a property in Portugal...

Homebuyers should be aware that there are a number of applicable taxes for property purchases. Landlords must also pay an annual tax on rental income.

Property Transfer Tax (PPT)

The acquisition of properties in Portugal is subject to Property Transfer Tax, PPT (Imposto Municipal sobre Transmissões Onerosas de Imóveis, IMT). This tax is due on the transfer of property rights over real estate or other acts which produce similar economic results.

PTT is levied on the property transfer value or its taxable value (VPT), computed according to the Municipal Property Tax (IMI) Code, whichever is the higher. Some of the criteria to measure the tax value of a property are the following:

  • Construction or property cost (the first one is used for urban properties and the latter for rural properties)
  • Property size (number of rooms, land area)
  • Type of use (residential, commercial, industrial)
  • Location of property (if it’s in the suburbs or in the city centre)
  • Quality and comfort aspects (if it is degraded, does not have sanitary conditions, elevator)
  • Age of the property

The tax should be paid before completion as the PTT certificate will be required by the notary for signing the sale and purchase deed. The PTT can be paid at any local tax office.


  • There is generally NO exemption from paying PTT, unless the property’s tax value is below € 92,407 and it is used for the owner’s own permanent residence
  • There is a higher rate for property acquired by owners resident in a tax haven

Property and Land Registry Fees

Fees will typically be around 1 percent of the total value of the property.

Municipal Property Tax

Municipal Property Tax, MPT (Imposto Municipal sobre Imóveis, IMI) is due, on an annual basis, by owners of real estate located in Portuguese territory.

Until 2012 MPT was levied according to different rates, depending on whether the property’s tax value had already been computed according to the rules set out in the MTP Code. Where a property had not yet been valued, the acquisition price would be used as the taxable base.

However, further to the Troika negotiations, a major valuation of all properties has been undertaken. As such, from 2013 onwards, MPT will always be levied based on the property’s tax value.

On this basis, the purchaser can expect to pay anything between 0.2 percent and 0.5 percent on an urban property and 0.8 percent on a rural property.

Note: Properties held via entities resident in tax havens are subject to a 7.5 percent rate.

Stamp Duty (Imposto de Selo)

Stamp duty is another tax on the acquisition of property. Anyone who acquires property, is given or inherits a house, shop, office, warehouse or any property or who has taken out a property loan (i.e. a mortgage) must pay stamp duty.

Stamp duty’s taxable base is the same used for PTT purposes and, as a general rule, 0.8 percent of the property’s tax value is payable for property acquisitions.

Buying Property as an Investment

If a non-resident purchaser acquires a property with the intention of renting it, they are liable to pay tax on the rental income at a 16.5 percent rate.

Please note, however, the State Budget’s Proposal for 2013 foresees an increase in this rate to 28 percent.

If the purchaser is considered resident for tax purposes in Portugal, the State Budget’s Proposal for 2013 foresees the introduction of a special 28 percent taxation rate for this type of income, and it may be added to any other income obtained in Portugal for purposes of determining a global rate (which can be more or less than 28 percent).

Further Information

For further information on property taxes, please visit:

Information provided by MC&A - Attorneys at Law Av. da Liberdade, 262 - 4º Esq, 1250-149 Lisbon, Portugal Tel: +351 21 356 99 30, Fax: +351 21 356 99 39 Website / email