How much is Portugal property transfer tax? Buying property in Portugal is a lifelong investment. First things first, foreigners buying a property in Portugal pay the same exact tax (IMT) as the local Portuguese and that is good news!
This article offers a detailed outline of taxes that buyers should be aware of when purchasing a property in Portugal, starting with the all-important IMT and Stamp Duty.
IMT – The Portugal Property Transfer Tax
IMT, or Imposto Municipal sobre Transações Onerosas de Imóveis, is a property transaction tax paid by the buyer when there is a transfer of ownership of real estate in Portugal. The percentage of tax charged can range from 1% to 8%, depending on a few factors including the purchase price for the real estate, the location of the property and whether it is first or second home in Portugal.
You can calculate an estimated Portugal’s property transfer tax cost on your purchase in our IMT Calculator here.
It’s also worth noting that Portugal’s property transfer tax or IMT has to be paid before the completion of purchase but if the transfer takes place outside the territory of Portugal, the payment may be made the following month.
Stamp Duty in Portugal
The Stamp Duty, or Imposto de Selo, is another property transfer tax that buyers should be familiar with. It’s reportedly the oldest tax in Portugal and is charged for pretty much all contracts and legal affairs regarding your real estate. This includes deeds, contracts, and bank mortgages to do with the house. The duty is accounted for by the buyer, charged at a fixed rate of 0.8% of the property’s registered fiscal value.
Mortgage taxes in Portugal
Taking out a mortgage is a huge part of purchasing a property anywhere. In Portugal, there are a few options including fixed rate or variable rate mortgages.
Check out this article about Mortgage for foreigners in Portugal
Whatever the product, the Portuguese government will charge you an additional tax called Imposto sobre a Concessão de Crédito, or the Mortgage Stamp Duty. This tax has a fixed rate of 0.6% of the mortgage amount and it is paid in cooperation with a bank, who may charge their own fees ranging from application to arranging a mortgage product.
Property Taxes to pay after the purchase in Portugal
Congratulations! You’ve completed the purchase of your dream home in Portugal. Here are some taxes you will need to pay annually on your property.
The Imposto Municipal sobre Imóveis is an annual tax, which you could compare to council tax in the UK. Price rates can range from 0.3% to 0.8% of a house’s registered fiscal value and is determined in different ways including the type of property, its history and location. The IMI can be doubled on properties that are left vacant, however, there are also ways that properties can be made exempt from IMI. For example, if you’ve purchased property for a permanent residency, you may be exempt from paying IMI. This exemption can range for three to six years, depending on the property’s value.
Another post-purchase tax is the AIMI, a relatively new tax that is infamously referred to as the Portuguese Wealth Tax as it affects those with a total real estate worth above 600,000 euros.
There are three levels of AIMI Tax in Portugal:
- Tax of 0.7% on property valued between €600,000 and €1 mi;
- Tax of 1% on property valued between €1 mi and €2 mi;
- Tax of 1.5% if the total value exceeds €2 million.