Taxes in Portugal
Taxes can feel daunting, but with the right guidance they don’t have to be. Here’s a clear breakdown of the key taxes and fees when buying or selling in Portugal.
Overview
- Work with a Lawyer: To ensure correct calculations and compliance.
- Know Your VPT: This figure impacts several taxes.
- Budget Beyond the Purchase Price: Consider IMT, stamp duty, legal fees, and potential CGT.
- Avoid Blacklisted Jurisdictions: They result in significantly higher tax rates.
Good to know:
- IMT is not charged when property is bought via a share purchase in a corporate structure.
- Rates may be higher for second-home purchases.
IMT & Stamp Duty
- Stamp Duty: 0.8% of the higher of the purchase price or VPT, payable before the final deed.
- Land Registry Fee: €250 (usually arranged by your lawyer).
- Notary Fees: based on the property’s sale price.
- Legal Fees: Typically 1–2% of the property’s value, depending on complexity.
Annual Taxes
IMI is an annual tax based on the VPT and varies by municipality:
- 0.3–0.45%: Urban areas (Loulé applies the minimum 0.3%).
- 0.8%: Rural properties.
- 7.5%: Properties owned by offshore entities in blacklisted jurisdictions.
IMI is usually paid in two or three instalments, depending on the amount due.
AIMI: Additional Municipal Property Tax
Introduced in 2017, AIMI is an annual tax on the combined VPT of all urban properties owned by an individual or couple.
- Individuals:
- 0.7%: €600,000–1M
- 1.0%: €1–2M
- 1.5%: Over €2M
- Couples: The €600,000 threshold doubles to €1.2M.
- Corporate Ownership:
- 0.4%: For companies (unless for personal use, then individual rates apply)
- 7.5%: For offshore entities in blacklisted jurisdictions
EXEMPTIONS: AIMI does not apply to rural or non-residential properties.
Capital Gains
CGT is charged on profits from selling property (sale price minus purchase price), with certain costs deductible, such as renovations and legal fees.
- Non-Residents: 50% of gains are taxable and added to annual income tax.
- Residents: 50% of gains are taxable and added to annual income tax.
- Corporate Ownership: Flat rate of 25% for foreign companies.
Exemptions: Selling your main residence and reinvesting the proceeds into another primary residence within the EU/EEA within 36 months can exempt you from CGT.
Inheritance
Portugal does not charge inheritance tax for immediate family (spouses, children, parents). However, stamp duty applies:
- 0.8%: For immediate family (based on VPT).
- 10%: For gifts or inheritance to non-family members.
- On death – immediate family is fully exempted
Planning Ahead: Key Tips
- Work with a Lawyer: To ensure correct calculations and compliance.
- Know Your VPT: This figure impacts several taxes.
- Budget Beyond the Purchase Price: Consider IMT, stamp duty, legal fees, and potential CGT.
- Avoid Blacklisted Jurisdictions: They result in significantly higher tax rates.
Portugal’s NHR 2.0
Portugal’s NHR 2.0, officially known as the Tax Incentive for Scientific Research and Innovation (IFICI), is the country’s updated tax regime designed to attract highly qualified professionals and international talent. Introduced after the original NHR programme closed in 2024, it offers a 10 year period of tax advantages, including a flat 20% income tax rate on qualifying Portuguese sourced income and potential exemptions on certain foreign income, depending on double taxation agreements. Unlike the previous regime, NHR 2.0 is more targeted, focusing on individuals working in high value sectors such as technology, research and innovation, making it a more selective but still highly attractive option for those relocating to Portugal.
This is a guide to the essentials — but always consult a lawyer, as details can vary with residency and double-taxation agreements.
Quick Guide to Property Taxes in Portugal
| Tax | When Paid | Rate / Basis |
|---|---|---|
| IMT (Property Transfer Tax) | One-time, before signing the final deed | 6–7.5% (urban property), 6.5% (plots), 5% (rural land), 10% (offshore in blacklisted jurisdictions) |
| Stamp Duty | One-time, before signing the final deed | 0.8% of purchase price or VPT (whichever is higher) |
| IMI (Annual Property Tax) | Annually | 0.3–0.45% (urban), 0.8% (rural), 7.5% (blacklisted entities) |
| AIMI (Additional Municipal Tax) | Annually on combined VPT of urban property | 0.7–1.5% (individuals), thresholds double for couples; 0.4% (companies) |
| Capital Gains Tax (CGT) | On sale of property | 50% of gain taxed as income (residents), 25% (non-resident companies) |
| Inheritance & Gift Tax | On inheritance or gifts | 0.8% (immediate family), 10% (non-family) for gifts. On death for immediate family is fully exempted. |
VPT = Valor Patrimonial Tributário, or Tax Asset Value, set by local tax authorities. This figure impacts several property taxes and is based on construction costs, age, location, and use.
Planning Ahead: Key Tips
- Work with a Lawyer: To ensure correct calculations and compliance
- Know Your VPT: This figure impacts several taxes
- Budget Beyond the Purchase Price: Consider IMT, stamp duty, legal fees, and potential CGT
- Avoid Blacklisted Jurisdictions: They result in significantly higher tax rates
Need Help?
By staying informed and well-prepared, you can navigate Portuguese property taxes with confidence. If you have questions or need tailored advice, contact our team for assistance or a referral to a trusted tax professional.
And if some of these terms feel unfamiliar, head to our Property Glossary where we explain the Portugal-specific acronyms and expressions in plain language.