Buying a home in Portugal involves paying several taxes, both at the time of purchase and annually thereafter. Below is a clear and comprehensive guide to the taxes to consider:

IMT – Municipal Property Transfer Tax

This tax is paid only once, before the deed is signed, and applies whenever there is a transfer of ownership of a property, except in the case of inheritances.

The amount depends on the type of property (owner’s or second home, rural or urban), the value of the deed, or the taxable property value (VPT) – whichever is higher.

If it is a first home (owner’s and permanent home), you may be exempt.

Stamp Duty (IS)

This tax is also paid once, at the time of purchase, at a rate of 0.8% of the property value (deed or VPT, whichever is higher).

IMI – Municipal Property Tax

This tax is paid annually after purchase. The rate varies depending on the municipality and the type of property:

Urban: between 0.3% and 0.45% (determined by the municipality)

Rural: 0.8%

This basis for calculating the Taxable Property Value (VPT) is assigned by the Tax Authority.

It is also worth noting that there is also the possibility of an IMI exemption (partial or total) for properties with a VPT of up to €125,000, if it is a permanent residence and the annual household income is less than €153,300. This exemption is valid for 3 years.

Stamp Duty on Housing Loans (if applicable)

If financing is provided through a housing loan, a 0.6% rate is applied to the loan amount, payable at the time of signing the contract with the bank.