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.

Notes:

  • 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.

MPT is levied on the property’s fiscal value. It takes into consideration criteria such as property age, size, commodities and location. The property tax is fixed annually by each municipality and ranges from 0.3% to 0.8%.

MPT can be paid in one single installment in April if the tax is under 250 euros, in two installments (April and November) if the value is between 250 and 500 euros, or three installments (April, July, November) if the amount 500 euros. 

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

Portugal residents pay tax on rental income at a flat rate of 28%. Non-residents pay tax at 28%; the letting agent must deduct this from the gross rent.  

Non-residents are required to appoint a local representative in Portugal for tax purposes. 


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