Taxes on real estate purchases in Portugal
Property taxes of a real estate purchase in Portugal
This is a point that Europeans who come to buy a house in Portugal attach great importance to. Making this type of investment elsewhere can be very expensive and moving to the south of France, for example, where a similar climate can be found, becomes very complicated over the years. You will find on this page all the taxes and property taxes that you will have to pay following a property purchase.
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Property taxes on purchase
IMT: Property Tax on Expensive Real Estate Transmission
The first tax is called IMT: Property Tax on Expensive Real Estate Transfers. It is payable when buying a house or apartment in Portugal and depends on the amount of the tax. Below you will find a table and some examples to help you make your own calculations.
Acquisition of a permanent property
Buying a second home
- “Valor sobre que incide o IMT”: Value of the property
“Taxa a aplicar”: Tax rate
“Parcela a abater”: Slice to be slaughtered.
As you can see, depending on whether you want to buy a main or second home in Portugal and for the same price of the house, the LMI tax will be different. It is therefore important to take this into account before you buy.
Here is the formula to make the necessary calculations of the property tax on onerous real estate transfers :
- Value of the property x Tax rate – Portion to be abated
For a main residence of 250 000 € : (250000 x 7%) – 9087,22 = IMT of 8412,78€. - For a second home of 300 000€: (300000 x 8%) – 11035,30 = IMT of 12964,7€.
The deductions for a principal residence are much more interesting and are partly at the origin, in addition to the status of Non Habitual Resident, of the expatriation of an increasing number of English people. It should also be noted that these rates may vary if you wish to make a property purchase on the mainland or in the Azores but also for these specific cases :
- Acquisition of agricultural land: 5%.
- Acquisition of building land, shops, offices or isolated parking lots: 6.5%.
- Offshore acquisition: 10% without exemption (When the acquirer is a legal entity having its registered office or domicile in a country subject to a more favourable tax regime)
Property registration
After the deed of sale, you will have to carry out a definitive conversion procedure of the provisional registers :
- Cost of the files: between 150€ and 250€.
- Cost of the property deed and the notary: 615€.
Property taxes following property purchase
Stamp Duty: “Imposto de Selo”
This property tax, like the LMI, is paid only once at the time of purchase. Its rate is fixed, 0.8% and is calculated on the value of the purchase or the tax value if it is higher.
- For the purchase of our house at 250000€, the stamp duty will therefore be 2000€.
If the fiscal asset value of a residential property exceeds EUR 1,000,000, a stamp duty of 1% is applied.
IMI : Imposto Municipal Sobre Imòveis
Once your investment has been made, you will have to pay an annual property tax called IMI: Imposto Municipal Sobre Imòveis. You are liable for it from the moment you owned a property on 31 December each year.
The rates are as follows:
- Agricultural land: 0.8%.
- Other properties: between 0.3% and 0.8% (Rate fixed by each town hall)
Depending on the amount of this real estate tax, you will have to make one, two or three payments:
- Amount equal to or less than 250€: one payment in April
- Amount greater than 250€ / Amount less than or equal to 500€: two payments in April and November
- Amount over 500€: three payments in April, June and November
If the purchaser is a legal entity domiciled in a country where the tax regime is much more favourable, the IMI rate is increased to 7.5%.
Further information :
- You can pay the Imposto Municipal Sobre Imòveis at any tax office, post office, Multibanco ATMs or by home banking.
- If you reside outside the European Union, you will have to appoint a representative domiciled for tax purposes on Portuguese territory at a tax office or on the Internet portal of the Tax Service: www.portaldasfinancas.gov.pt.
Tax on real estate capital gains in Portugal
If you wish to resell your property, be aware that you will have to pay tax on the capital gains generated by your investment. The fixed rate of this tax is 25%.
All the figures given on this page are subject to annual variations, so do not hesitate to check the new rates in force when you buy your property or to contact us so that we can arrange for you to be accompanied by the competent tradesmen who speak English and Portuguese.
Some more information about real estate in Lisbon or elsewhere in Portugal :
- Taxes and duties on rental income in Portugal
- Taxation in Portugal
- The real estate market in Portugal
- Buying a Portuguese second home
- Real estate market in Lisbon
Do not hesitate to contact me if you wish to be accompanied in your real estate search in Lisbon: identification of your criteria, contact of the various estate agencies on the spot, realization of photos to visualize the selection, accompaniment with the visits and help with the conclusion of the contract under the best conditions.
Real estate project in Lisbon
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