Property tax in Portugal
Consider property tax in Portugal if you are thinking about buying a House or a Land there, it is vital to know the costs -taxes- involved.
Specific Property Tax in Portugal you will be facing
Take into account Property Tax in Portugal if you are thinking about buying a House or a Land there, it is important to understand the costs involved – including government taxes.
The first step before buying a property is to get a NIF (Portuguese Fiscal Identifier Number) to be able to sign the public deed and to facilitate the payment of the relevant taxes. In addition, you will need to pay notary fees for this operation.
You also need to pay specific taxes for your property. These taxes are obligatory when you purchase a property in Portugal. They are namely the Municipal property tax (IMI), property transfer tax (IMT), and the tax on stamps or Stamp Duty (IS). Each is different and has its own calculation methods.
Municipal Property Tax (IMI)
Every year you will have to pay a property tax that’s called IMI – Immovable Property Tax that is a Municipal Tax.
This Property tax is calculated base on the Patrimonial Value that the Tax office gave to your property that you can check before buying in Caderneta Matricial of the Property from the tax Office. The Owner as this and you can also get it online on the tax office website.
Property tax rates range from 0.3% to 0.45%. While properties in rural areas are taxed at 0.8%, properties in more urban areas are taxed within the mentioned range.
Property Transfer Tax (IMT)
The IMT (Imposto Municipal sobre as Transmissões Onerosas de Imóveis) tax is collected every time a house is purchased in Portugal. The rate is variable according to the type and value of the property. The tax is calculated by the value declared in the deeds or on the rateable value – whichever is higher. You must pay this tax before you buy the property. You can calculate the IMT rate as follows:
- IMT = [Value of the deed or rateable value (the higher of the two) x Rate to apply] – tax abatement
The following three criteria are important for the calculation of this tax:
- Property type : Urban or rural
- Location of the house : Mainland Portugal or its autonomous regions
- Purpose of buying : Principal or secondary residence
- IMT rates applied to private property purchases of primary residences
