Property Taxes in Portugal in 2026: The 4 Taxes to Know Before You Get Started

1. IMT (Imposto Municipal sobre as Transmissões Onerosas de Imóveis)

IMT is the transfer tax due upon the purchase of a property. It must be paid before the signing of the notarial deed (escritura).

The rate applies to the acquisition price (or the taxable asset value, if higher) and depends on the intended use of the property.

The rate is therefore:

• 5% for rustic properties
• 6.5% for urban properties not intended for residential use, such as commercial premises or warehouses
• variable (marginal rate between 0 and 8%) for urban residential properties. In this case, IMT applies by brackets, reduced by a deductible amount for each bracket, which lowers the amount of tax.

1.1 Possible exemptions

Several situations allow buyers to avoid IMT entirely or partially:

Buyers aged 35 or under, purchasing their primary residence

A full exemption applies to the purchase of a first primary residence by buyers aged 35 or under, up to €330,539 (2026). A partial exemption applies to purchases between €330,539 and €660,982.

This exemption also covers Imposto de Selo.

Conditions: the buyer must not have owned another property in the previous 3 years, and the property must remain their primary and permanent residence.

Purchase for resale

Real estate professionals who purchase a property with the intention of reselling it may benefit from an IMT exemption, provided the property is resold within the legal deadline of one year from the acquisition. This deadline was shortened by the 2023 law known as "Mais Habitação" and is closely monitored by the tax authorities. In addition, this exemption requires that no works be carried out that could alter the property's taxable asset value.

Urban regeneration and rehabilitation

Exemptions also exist for properties located in urban rehabilitation zones, subject to renovation work conditions.

1.2 The specific case of non-residents

Following the recent reform, non-resident buyers (for tax purposes) are subject to a flat 7.5% IMT rate on the purchase of urban residential property, with no access to the usual progressive allowances.

Good news: it is possible to avoid this flat rate, under certain conditions related to your tax situation or to renting the property out under specific conditions. We have devoted a full article to this topic, worth consulting if this applies to you. You can read my complete article on the subject here.

2. Imposto de Selo (Stamp Duty)

In addition to IMT, the buyer must pay Imposto de Selo, set at 0.8% of the acquisition price. Like IMT, it is paid before the signing of the notarial deed, and both taxes are generally calculated and settled together through the guias issued by the tax authorities.

💡 Good to know: when the exemption for buyers aged 35 or under applies, it covers both IMT and Imposto de Selo.

3. IMI (Property Tax)

Unlike the two previous taxes, IMI (Imposto Municipal sobre Imóveis) is not paid once at the time of purchase, but every year, for as long as you remain the owner of the property. It is the Portuguese equivalent of the annual property tax.

Its calculation is based on the taxable asset value (VPT) of the property, an administrative value that may differ from the market price, to which a rate set annually by the municipality where the property is located is applied. This rate therefore varies from one municipality to another, which can represent a significant difference depending on your property's location.

In addition to IMI, an additional tax known as "AIMI" applies when the value of a person's real estate holdings exceeds €600,000. In this case, AIMI is charged at a flat rate of 0.7% on the portion of the taxable asset value exceeding €600,000.

4. Property Capital Gains Tax

When you sell a property for more than its acquisition price, the resulting gain (net of deductible expenses) is taxed as a capital gain (mais-valia) realised.

For Portuguese tax residents, only half of the capital gain realised is included in the overall income subject to progressive IRS taxation.

However, the capital gain may be exempt from taxation under certain circumstances.

The reinvestment exemption

An exemption exists if you sell your primary and permanent residence and reinvest the proceeds in the purchase of a new property intended for the same use, within a period of 24 months before or 36 months after the sale. This exemption may be full or partial, depending on the share of the sale price actually reinvested.

⚠️ This point deserves particular attention: reinvestment deadlines are strict.

Letting at a moderate rent

Decree-Law No. 97/2026 provides that the capital gain may also escape tax if the proceeds of the sale of a residential property are reinvested in a home intended for letting at a moderate rent, within the same windows as for the primary residence (24 months before or 36 months after the sale). Unlike the classic exemption, this regime does not require the property sold to be your primary residence. It is, however, subject to strict conditions (rent ceiling, minimum letting period). Here is the link to the full article.

Other cases of exemption

Other specific cases also allow for an exemption, notably for sellers aged 65 or older (or retirees) reinvesting in certain eligible financial products, or for properties acquired before 1989.

Conclusion: Why anticipate these 4 taxes from the start

Each of these taxes arises at a different stage of your property journey – at purchase, every year, and then upon resale – and some offer exemption mechanisms that only apply if properly anticipated and documented from the outset.

Planning a property purchase or sale in Portugal? Let's talk to identify the exemptions you may be entitled to and secure your project from the start.