Buying property in Portugal
- IMT (Imposto Municipal sobre Transmissoes) - the purchase tax. Progressive from 0-8% depending on price and use (primary residence vs investment vs second home). Higher rates apply for buyers from certain low-tax jurisdictions and for properties in areas designated as housing-shortage zones.
- Stamp Duty (Imposto do Selo) - 0.8% of the purchase price.
- Notary and registration fees - typically EUR 800-2,000.
- Legal fees - typically 1-1.5% of purchase price for a Portuguese property lawyer (highly recommended for expats).
Owning property - annual costs
- IMI (Imposto Municipal sobre Imoveis) - the annual property tax, 0.3-0.45% of the property's registered fiscal value (Valor Patrimonial Tributario, VPT). Paid in May, sometimes in instalments.
- AIMI (Adicional ao IMI) - an additional wealth tax of 0.4-1.5% on aggregate property values over EUR 600,000 (per individual, EUR 1.2M for couples).
- Condominio - building service charges if applicable, typically EUR 30-150/month for apartments.
- Insurance - mandatory buildings insurance for mortgaged properties.
Selling property - capital gains
- Calculate the gain - sale price minus purchase price minus allowable costs (IMT, legal fees, capital improvements).
- 50% of the gain is taxable for tax residents. Non-residents face different rules (often the full gain is taxable at flat rates).
- Add to other income at progressive IRS rates (13-48% in 2025).
- Primary residence relief - if you reinvest the proceeds in another Portuguese (or EU/EEA) primary residence within 36 months before or after the sale, the gain is rolled over tax-free.
- Senior reinvestment - over-65s can reinvest in qualifying retirement products to defer the gain.
Capital gains on Portuguese property for non-residents are typically taxed differently - often the full gain (not 50%) at flat rates. EU/EEA non-residents have specific protections under Court of Justice case law. UK non-residents (post-Brexit) lost some of these protections; a specialist accountant handles the current treatment.
FAQ
Frequently asked questions
Are foreign property gains also taxed in Portugal?+
For Portuguese tax residents, yes - worldwide capital gains are reportable. Treaty relief usually means tax paid in the source country (e.g. UK) is credited against any Portuguese tax due on the same gain. The math depends on the treaty and rates.
What about Golden Visa property?+
Golden Visa rules changed materially in 2024 - residential property no longer qualifies for new applications in most areas. Existing Golden Visa holders retain their status; new applicants must use other qualifying investment categories. Tax treatment of the underlying property follows standard rules.
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