Taxation of Real Estate Acquisition in Portugal: Taxes you Need to Anticipate
- mouniamikou
- 31 août 2023
- 2 min de lecture
Dernière mise à jour : 11 mai 2024
Portugal has emerged as one of the most sought-after destinations in Europe for real estate investments, attracting international buyers with its pleasant climate, enchanting landscapes, and appealing tax incentives.
If you're considering purchasing property in Portugal, it's crucial to understand the associated tax implications.
This article will guide you through the key tax considerations when acquiring real estate in Portugal. Once you’ll own the property, another set of tax will apply.
In my next articles, I will take you through
- Tax considerations for real estate owners (2/3), then
- Tax condireations for real estate sellers (3/3).
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Let’s now dive into the tax considerations for real estate buyers. When acquiring real estate in Portugal, the buyer pays:
1. Property Transfer Tax (IMT)
Acquiring property in Portugal is subject to IMT (Imposto Municipal sobre Transmissões Onerosas de Imóveis), which is a municipal tax on the transfer of real estate for consideration.
IMT rates usually apply to the sale price. However, if the sale price is lower than the taxable value, the latter will be used to calculate IMT.
IMT rates depend on the buyer and the property.
For buyers, it depends on whether the buyer is an individual or a legal entity.
For properties, the type of property, its location, and its use are considered.
For example, for an individual purchasing an apartment to be used as a permanent residence, the rate is progressive, meaning it varies according to the property's value. The rate ranges from 0% to 8%.
There are rate reductions and exemptions, particularly for acquisitions intended for resale or rehabilitation. These exemptions have specific conditions and modalities.
2. Stamp Duty (IS)
Stamp duty, known as Imposto do Selo, is currently set at 0.8% and applies to the taxable base used for calculating IMT (see paragraph 1. on IMT).
3. Registration Fees
In addition to IMT and IS, buyers need to consider registration fees.
These fees are usually paid by the notary and integrated in its services fees. ,
They are typically calculated as a percentage of the property's value and can vary, but generally represent around 1% to 2% of the purchase price.
Conclusion
To optimize your tax obligations when purchasing real estate in Portugal, you can engage in thoughtful tax planning. Working with tax and legal experts can assist you in identifying strategies to minimize long-term tax costs while adhering to current laws and regulations.
Once you become a property owner, your real estate assets are subject to IMI and potentially AIMI, as detailed later in the next article. To be informed of its publication, subscribe here clicking on « s’abonner ».