IMT

The real estate transfer tax in Portugal, known as IMT, is one of the key taxes that every property buyer in this country has to deal with. It applies to all transactions involving the transfer of ownership of real estate for consideration, whether it is an apartment, house, or land.

If you are buying a house or apartment as a vacation property or a rental property, the tax is graded progressively according to the purchase price, ranging from 1% to 8%.

There are preferential rates and a certain threshold for residential properties intended for permanent residence. If the purchase price does not currently exceed approximately €100,000, the tax is zero. As a foreigner, you can also buy residential property, but you must become a tax resident in Portugal and actually use the property as your primary residence.

Rustic buildings and land are a special category. These properties are subject to a flat rate of 5%, regardless of their value.

You can use the calculator here to calculate your IMT:https://www.doutorfinancas.pt/ferramentas/simulador-imt/

IMI

Property tax in Portugal is called IMI and is an annual obligation for every owner. The amount of tax depends on the cadastral value of the property (VPT – Valor Patrimonial Tributário) and the rate set by the local municipality. For ordinary properties, rates usually range between 0.3% and 0.45%, while for rural land and buildings, the rate is 0.8%.

The IMI amount is calculated once a year, and the tax administration sends a notification either by post or to an electronic tax box. Payment can be made in several ways – via internet banking, directly at an ATM, at the post office, or at banks cooperating with the tax administration. For foreigners, the easiest way is to use the internet banking service of a Portuguese bank, where payments to the state are usually found under the name Pagamentos de Serviços/Estado.

If the amount does not exceed €100, it must be paid in a single installment by the end of May (we fall into this category – you can also check your IMI payment information by logging into your account at https://www.portaldasfinancas.gov.pt; this information was displayed there in mid-April). If the tax is between €100 and €500, it is paid in two installments – in May and November. If the amount exceeds €500, it is paid in three installments – in May, August, and November.

The advantage is that you do not pay IMI tax in the year you purchased the property – the previous owner still pays it for that year. The decisive factor for the payment obligation is who was the owner of the property on December 31 of the previous year.