.jpg)
Property Taxes in Portugal: What Owners & Landlords Need to Know
- Antonio Pinheiro
- 1 day ago
- 2 min read
If you own property in Portugal — whether as a home, an investment, or for rental income — it’s important to understand the main taxes that apply. Portugal’s property tax system combines one-off charges when you buy, ongoing ownership taxes, and taxes on income or capital gains when you rent or sell. Here’s a breakdown:
1. Taxes When You Buy Property
IMT (Property Transfer Tax): Paid when you purchase, with rates up to 7.5% depending on the value, type, and use of the property.
Stamp Duty: Usually 0.8% of the purchase price, plus additional amounts if you take out a mortgage.
Other Costs: Notary, registration, and legal fees should also be factored in.
2. Annual Property Taxes
IMI (Municipal Property Tax): Paid yearly to your local council, based on the “fiscal value” of your property (VPT). Rates usually range from 0.3% to 0.45% for urban properties, and 0.8% for rural ones.
AIMI (Additional to IMI): A wealth tax that applies if the total value of your properties exceeds €600,000 (or €1.2 million for couples). Rates rise progressively from 0.7% to 1.5%.
3. Taxes on Rental Income
Residents: Can be taxed at a flat 28% on rental income, or choose to include it with other income and pay progressive rates (14.5%–48%).
Non-residents: Generally taxed at a flat rate of around 25–28%.
Deductions: Maintenance, repairs, insurance, IMI, and management costs are deductible.
Short-term rentals (AL licenses): May be subject to different rules and VAT in some cases.
4. Taxes on Selling Property
Capital Gains Tax (CGT):
Residents pay tax on 50% of the gain, at their personal income tax rate.
Non-residents are generally taxed at a flat rate, although EU rules have narrowed the gap with residents.
Exemptions: Reinvesting proceeds into another primary home in Portugal or the EU/EEA may reduce or eliminate CGT. Purchase costs, renovations, and transaction fees can also be deducted.
5. Other Taxes & Considerations
Stamp Duty on rental contracts (paid when registering a lease).
Inheritance & gifts: Transfers to close family members may be exempt from tax, but stamp duty applies to others.
Municipality differences: IMI rates vary depending on where your property is located.
Changing rules: Portugal updates property tax laws often, so staying informed is essential.
Tip: The “VPT” (taxable property value) is often lower than market value, but it’s the figure used to calculate most property taxes. This can work in your favor for IMI and AIMI.
Owning property in Portugal can be highly rewarding, but taxes can be complex — especially if you’re renting or planning to sell. Always confirm the latest rates and consider professional advice to optimize your tax situation.
Thinking about buying, renting, or selling in Portugal? Send me a message — let’s chat about your plans!
Antonio Pinheiro
+31 (0)6 51760042
Comments