Buying a property in Portugal: all the taxes you need to know before and after buying in 2025

Taxes on the purchase of a property in Portugal

When you buy a property, several taxes apply as soon as the deed of sale is signed. Their amount varies depending on whether the property is new or old, its price, and its purpose. Unyk-Place has deciphered for you the subtleties of the Portuguese tax system to take into account when making your upcoming purchase.

For old properties (resale):

• IMT (Imposto Municipal sobre Transmissões Onerosas de Imóveis): this is the real estate transfer tax. It is progressive, with a rate of between 1% and 8%, depending on the purchase price, the type of property (urban or rural), and its use (main or secondary residence).

  • Stamp duty (Imposto do Selo): this applies to all purchases and amounts to 0.8% of the tax value of the good.

For new properties:

• VAT (IVA): it applies to new and renovated properties, or the ones that are part of a tourist program. The rate is 23% in mainland Portugal, except in areas classified as historic, where the VAT rate is 6%. Madeira and the Azores are subject to VAT of 22% and 16% respectively.

• This VAT is included in the displayed sales price.

Taxes while holding the property

Once you are the owner, you will have to pay annual taxes related to the possession of your property.

IMI – Municipal Real Estate Tax:

• It works similarly to the property tax or housing tax in France.

• The rate varies between 0.3% and 0.8% of the tax value of the property, depending on the location, age, and nature of the property.

AIMI – Additional tax to the IMI (real estate wealth tax):

• Applicable if the tax value of the property exceeds €600,000 for a single person or €1.2 million for a couple.

• Rate: 0.7%.

Tax residency: what you need to know

Owning a property in Portugal does not automatically make you a tax resident. However, certain criteria can change your situation:

• If you spend more than 183 days a year in Portugal, you will be considered a Portuguese tax resident.

• Even if you stay for a shorter period, having permanently available housing can also justify this status, under certain other conditions.

This change of tax residence may have consequences on your taxation, especially in the event of a resale. To find out what applies to your case, it is important to refer to your country's tax treaty with Portugal.

Note that to acquire a property in Portugal and then transfer your tax residence there, you will be required to obtain the NIF (Tax Identification Number). The application can be made online or on-site, alone or through intermediaries. 

The Non-Habitual Resident (NHR) Scheme

For newcomers, the NHR regime can offer attractive tax advantages for 10 years.

What has changed since 2023–2024: The Portuguese tax regime for Non-Habitual Residents (NHR) was replaced in 2024 by the new scheme called Incentivo Fiscal à Investigação Científica e Inovação (IFICI), commonly referred to as NHR 2.0.

• Foreign income is no longer exempt as before. Depending on the double taxation treaties between Portugal and the applicant's country of origin, certain foreign income (pensions, dividends, capital gains) may be exempt from tax in Portugal. (source) 

• NHR 2.0 refocuses on attracting highly qualified professionals in high-value-added sectors. To benefit from it, candidates must work in specialized trades in management, health, engineering, research, technology, or skilled crafts. This new orientation aims to strengthen the Portuguese economy by attracting talent capable of meeting the needs of the market. (source) 

Points to watch out for when buying

To avoid any complications when buying in Portugal, it is essential to be well informed about:

• Properties with unclear or poorly registered legal status

• Debts associated with the property (electricity bills, unpaid taxes, etc.) that can be passed on to the new owner

• Hidden costs: taxes, registration fees, notary and lawyer fees

It is strongly recommended to:

• Use a serious real estate agency with an AMI license displayed

• Engage a duly selected independent local lawyer, who will request a full statement of charges and property status before purchase and check the status of any building or renovation permits.

In addition, for French nationals, remember that the role usually played in France by the notary sesul, will be carried out in Portugal by the lawyer on the one hand, as counsel, and the notary on the other hand, as a control and registration. 

If you buy a property from abroad, to secure your transactions, surround yourself with the right contacts. Unyk-Place can be your real estate agency of reference in Portugal: our multilingual, trained, and responsive team accompanies you at every stage, in connection with a network of reliable partners to whom we can introduce you, to offer you complete and trusted support.

Frequently Asked Questions

Does becoming a homeowner in Portugal make me a tax resident?
No. You must spend more than 183 days per year or establish your habitual residence there to be considered a tax resident.

Is Portugal tax-advantageous for expats?
Yes, under certain conditions. The NHR regime offers attractive tax advantages, limited to 10 years. It is advisable to consult a tax advisor to check your eligibility.

Do I have to pay taxes in Portugal even if I don't live there?
Yes, as a non-resident owner, you have to pay certain taxes like IMI (municipal tax) every year. If you rent out the property, you will also have to declare and pay taxes on rental income in Portugal, even if you reside abroad.

What happens if I sell my property in Portugal?
The sale of a property can generate a taxable capital gain. Non-residents are generally taxed at 28% on this capital gain. Tax treaties between Portugal and your country of residence can help avoid double taxation.

To better understand the tax framework applicable to real estate in Portugal, The Municipal Tax Code on Real Estate (CIMI) and the Municipal Tax Code on Onerosas Transfers of Real Estate (CIMT), both introduced by Decree-Law no. 287/2003, respectively regulate the annual taxation related to the holding of assets and that applicable at the time of their transfer. In addition, there is the IRS Code (CIRS), which governs the taxation of rental income or capital gains realized by individuals, as well as the IRC Code (CIRC) for companies that own real estate assets. Law no. 7-A/2016 introduces the AIMI supplementary tax, intended for high-value real estate assets. Finally, the provisions of the Notarial Code and the Land Registry Code govern the formalities for the registration of transactions, and the annual finance laws (Orçamento do Estado), as well as various ministerial decrees, regularly adapt these rules, particularly in terms of exemptions. tax rates or benefits in urban rehabilitation areas.

The information presented in this article is given for information purposes only and does not replace the up-to-date opinion of a professional. As taxation can change, we recommend that you check each point with a local expert. If necessary, we can refer you to trusted specialists in Portugal.