Property Transfer Tax, or Imposto Municipal sobre Transmissoes (IMT). A municipal tax on the purchase of the real estate, which is paid in a single payment. The tax rate is often revised and depends on the value, type, purpose and location of the property.
IMT must be paid at the local tax office after signing the preliminary contract, but not less than three days before the final transaction.
Rates of the property transfer tax
|Property cost||Tax rate|
|Up to €92,407||0%|
|€92,407 to €126,403||2%|
|€126,403 to €172,348||5%|
|€172 348 to €287 213||7%|
|€287,213 to €574,323||8%|
Stamp duty. A one-time tax on the purchase or sale of real estate. The rate is 0.8% of the transaction amount.
Annual municipal tax, IMI. Paid after the purchase of the real estate. The rate is 0.3—0.5% of the value of the urban property and up to 0.8% of the value of the rural property. Municipalities independently calculate the tax rates, which vary from locality to locality.
The deadline for payment is the last day of the tax year, which ends in April. If the amount of tax exceeds €250, it is allowed to pay twice a year: in April and November.
Taxes are exempt from payment:
- Low-income households: up to €15,295 if the value of the building does not exceed €66,500.
- Owners of buildings that are to be renovated at the expense of the city. But they will be taxed after 3 to 5 years.
Wealth Tax. Real estate worth more than €600,000 is subject to the AIMI (Imposto Municipal Sobre Imóveis) tax. It is an additional tax in IMI, the rate is on average 0.7% of the value of the property.
For married couples who file a general tax return, the calculation of the wealth tax begins on properties worth €1.2 million or more.
Income tax. In Portugal, income tax is made up of different income of a citizen or resident, such as salary, pension, renting out real estate. The tax rate is calculated on a progressive income scale.
Investors who have received a residence permit in Portugal can get an exceptional tax regime. It allows to pay income tax at a flat rate of 20% for the first 10 years of residency.
Income from renting out real estate is also taxable. The amount is added to the resident's total annual income, which is already taxable.
Income tax rates in Portugal
|Up to €7,112||14.5%|
|€7,112 to €10,732||23%|
|€10,732 to €20,322||28.5%|
|€20,322 to €25,075||35%|
|€25,075 to €36,967||37%|
|€36,967 to €80,882||45%|
Capital Gains Tax. When selling real estate, residents of Portugal pay tax on 50% of the profits. For example, if a resident sells an apartment for €60,000, the tax will be charged only half of €30,000.
The amount of profit is also added to the total to the annual income of the citizen. The entire income is then taxed at the appropriate rate of the income tax scale.
No tax is due if the citizen or resident sells his or her primary residence and invests all of the income into the purchase of a new property, which will become the new primary residence. But if it turns out to be cheaper, the tax must be paid on the difference between the sale and purchase price.
Pensioners and residents who are over 65 years old can reinvest the capital gains into a pension fund or insurance company within 6 months of selling the property.
Inheritance tax. The tax was abolished for spouses, children, parents, and grandchildren in 2004. If an inheritance is received by a distant relative or a person who is not a family member, the tax applies and is charged at the rate of 10%.
How many investors chose the real estate option
91% of investors bought real estate in Portugal in order to obtain a temporary residence permit.
Investors most often buy real estate in Lisbon, Porto and resort cities in Portugal. Since the start of 2022, only commercial properties are available for purchase there under the investment program. Residential real estate can only be bought in internal regions, Madeira and the Azores.
Properties qualifying for the Portugal Golden Visa Program
How to get a residence permit in Portugal
It is possible to get a residence permit by naturalization, employment or studying. But the fastest way is by investment.
Portugal has a residence permit investment program for foreigners. Investors choose one of 8 investment options and are granted residency. Along with the investor, family members can get residence permits as well.
Investment options under the residence permit program in Portugal
|Purchase of real estate||€280,000+|
|Purchase of investment fund units||€500,000+|
|Capital transfer, e.g. deposit in a local bank||€1,500,000+|
+ 5 jobs
|Investments in scientific research||€500,000+|
|Support for culture and art||€250,000+|
|Opening a new business||10 new jobs|
It takes at least two months to obtain a residence permit. The investor and their family do not need to pass a language proficiency test or a history exam, as well as live on the territory of Portugal. It is enough to spend 7 days in the country to maintain residency status.
Portugal is a member of the European Union, so its residents are free to travel within the Schengen Area.
Immigrant Invest is a licensed agent of the Portugal residence permit by investment program. If you want to move to Portugal and travel to the Schengen countries without visas, seek advice from investment program experts.