Property Tax in Portugal: How to Pay Property Transfer Tax

When you buy property in Portugal, you pay IMT (the property transfer tax) and Stamp Duty at the point of purchase.

Once you own the property, you pay IMI every year, and AIMI if its combined tax value crosses the wealth tax threshold.

This guide sets out the 2026 rates for each tax, who qualifies for the IMT Jovem exemption for buyers under 35, and how to pay each tax through the Portal das Finanças.

Property Tax in Portugal: Key Takeaways

Before purchasing property, the buyer pays IMT, which ranges from 0 percent to 8 percent on the mainland, with a 6 percent single rate and a 7.5 percent top rate applying above set thresholds in 2026.

Buyers under 35 purchasing a first permanent home may qualify for a full or partial IMT Jovem exemption up to €660,982.

Stamp Duty (Imposto de Selo) is charged at 0.8 percent on most property purchase contracts.

IMI, the annual municipal property tax, is paid by property owners every year, with the number of installments depending on the amount due.

IMT (Property Transfer Tax): 2026 rates

IMT, or Imposto Municipal sobre Transmissões Onerosas de Imóveis, is the one-off tax you pay as the buyer when you purchase real estate in Portugal. It is calculated as the higher of the purchase price or the property’s taxable value (VPT), and it applies to residents and non-residents alike.

The rate depends on the purchase price and on whether the property will be your primary or secondary residence. The 2026 brackets for mainland Portugal are:

Secondary homes follow the same upper structure, but the first band is taxed at 1 percent rather than being exempt, and the 8% band ends at €633,931 before the 6 percent single rate applies up to €1,150,853.

You can estimate what you would owe using the official IMT simulator on the Portal das Finanças before making an offer.

IMT Jovem: The under-35 exemption

Since 2026, buyers up to age 35 purchasing their first permanent home benefit from the IMT Jovem exemption. Under this measure, no IMT or Stamp Duty is due on the purchase price up to €330,539. Between €330,539 and €660,982, the exemption is partial, meaning tax is only charged on the portion of the price above €330,539, not on the full amount.

The exemption is not automatic for every young buyer. It applies specifically to a first permanent home, so it is worth confirming eligibility with a tax adviser before relying on it as part of a purchase plan.

Stamp Duty in Portugal

The Stamp Duty, or Imposto de Selo, is charged on most contracts and legal acts related to your real estate purchase, including the deed and any related bank mortgage.

As the buyer, you are responsible for paying Stamp Duty, calculated at 0.8% on the higher of the purchase price or the property’s taxable value.

Long-term letting or sub-letting contracts are taxed separately, at 10% of the monthly rental amount. Corporate property transactions, where a company rather than an individual is the legal owner, are exempt from Stamp Duty.

Mortgage taxes in Portugal

If you finance your purchase with a mortgage, an additional tax applies: Imposto sobre a Concessão de Crédito, sometimes called the mortgage stamp duty. Mortgage credit pays stamp duty at a rate that depends on the loan term. For typical long-term mortgages, it is 0.6% of the borrowed amount. Confirm the applicable rate for your loan term with your bank or notary before completing the purchase.

IMI (Municipal Property Tax)

Imposto Municipal sobre Imóveis (IMI) is the annual tax paid by property owners in Portugal, based on the property’s taxable value (VPT) rather than the purchase price. UK readers can think of it as roughly equivalent to council tax.

Each municipality sets its own urban IMI rate between 0.3% and 0.45%; rural properties (prédios rústicos) are taxed at a flat 0.8%. The tax bill is issued automatically based on ownership as of 31 December of the previous year, and you’ll receive a payment notice through the Portal das Finanças, often by post as well.

If a property is left vacant for an extended period, the municipality can double the IMI charged. Some properties qualify for a temporary exemption; for example, a property bought for permanent occupancy may be exempt from IMI or pay a reduced amount for a period that depends on the property’s value.

AIMI (Wealth Tax)

Adicional ao Imposto Municipal sobre Imóveis (AIMI) is an additional wealth tax owed by individuals or companies whose combined property tax value exceeds set thresholds.

For individuals, the allowance is €600,000 per person; since this applies per person rather than per property, a couple filing jointly is exempt up to a combined €1.2 million before AIMI applies.

Above the allowance, AIMI is charged in three bands:

• 0.7% on property value between €600,000 and €1 million
• 1% on property value between €1 million and €2 million
• 1.5% on property value above €2 million

If you let out your property, rental income tax applies at a flat rate of 25%, with reduced rates for longer contracts; recent 2026 measures may lower this further, so check the current rate with a tax adviser.

Certain deductions can reduce your taxable rental income, including fire insurance costs (compulsory for all rental properties), value-related expenses such as IMI, condominium fees, and the cost of obtaining an energy certificate.

How your rental income is taxed also depends on whether you let your property short-term or long-term.

Short-term rentals

If you plan to rent your property to tourists for short periods, you’ll need to apply for an Alojamento Local (AL) license. This license allows property owners to rent out their properties for short-term tourism, and it can be a good option if you’re only planning to live in Portugal part of the year.

To obtain your AL license, you submit a request to the City Council with details about your property, including the type of property and how many rooms and beds it has. You’ll also need to arrange insurance to cover potential damage to the property.

Many central Lisbon zones restrict new AL licenses; check with the Câmara Municipal before assuming a property qualifies. If you’re exploring options, our guide to buying property in Lisbon covers this in more detail.

You can deduct property or maintenance costs incurred up to 24 months before renting from the license cost. Keep your receipts and prepare an invoice identifying the work carried out and its location.

Long-term rentals

For long-term rentals, you’ll need to draw up a standard lease agreement; an AL license isn’t required.

Capital gains are the profit you make from selling a property, and they’re subject to tax. In your tax return, you must disclose the year you purchased the property and how much you paid for it.

Residents are taxed on half of the net gain at normal income-tax rates, and gains on a main home can be exempt if the proceeds are reinvested in another main home within the legal window; before relying on an exemption, confirm the current rules with a tax adviser.

Exceptions to Capital Gains Tax in Portugal

There are a few ways to reduce or avoid Capital Gains Tax. For example, if you carried out maintenance work on the house, such as installing a new heating system or insulation, you can present the invoices for this work during your CGT assessment.

You may also be able to avoid CGT if you reinvest the full selling price of your property into a new home in Portugal. The property you sell must be your main home and match your tax address, and you must document the new property as your main residence within the required period after reinvesting.

In Portugal, inheritance tax is a tax levied on the transfer of assets from a deceased person to their heirs. The tax rate varies depending on the relationship between the deceased and the inheritor, with spouses and direct descendants taxed at a lower rate than more distant relatives.

In practice, there is little to no inheritance tax in Portugal; instead, a 10% stamp tax applies to assets located in Portuguese territory and passed on as inheritance. A stamp tax exemption applies whenever inheritance passes to spouses or direct family members, such as parents or children.

When buying property in Portugal, it’s worth working with a licensed real estate agent. You can confirm an agency’s license number and validity through IMPIC (Institute of Public Markets, Real Estate, and Construction).

Agency commissions in Portugal are typically around 5% plus VAT, paid by the seller; confirm the exact terms in the mediation contract.

If you’re a non-resident from outside the EU or EEA who wants to own property, hold a bank account, or carry out other commercial activities in Portugal, you must appoint a fiscal representative in Portugal.

Your fiscal representative acts on your behalf with the tax authorities and helps you obtain a Portuguese tax identification number (NIF), which is required before any of these transactions can take place.

How Can We Help You Find Your Dream Property?

Goldcrest Real Estate is the first buyer’s agent in Portugal, providing you with a tailor-made service to find your ideal property in Portugal. From sourcing to acquisition and aftercare, Goldcrest guides you throughout the buying process.

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