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Real estate tax in Portugal: what will you have to pay for your house?

Buying a house involves costs. Besides the amount of the actual purchase, there are also several real estate taxes in Portugal you’ll have to pay your house in Portugal. Here we explain which taxes to expect, and how they vary from place to place. 

Most foreigners who plan to move to Portugal end up buying a house. If this is the case with you, read on to know what real estate taxes in Portugal you’ll be subject to, so as not to be caught unawares. Besides the taxes on the actual transaction, you’ll also have to pay another yearly tax, indexed to the value of your house. 

Within  the real estate taxes in Portugal is the Municipal Tax on Onerous Real Estate Transactions (IMT). This is calculated based either on the value of the property, for tax purposes, or the amount which is declared at the time of the purchase, depending on which is higher. 

Check out this table for privately owned permanent residences:

Amount subject to IMT

(euros)

Percentage rates
Marginal Average (*)
Up to 92 407 0 0
Above 92 407 to 126 403 2 0,537 9
Above 126  403 to 172 348 5 1,727 4
Above 172 348 to 287 213 7 3,836 1
Above 287 213 to 574 323 8
Above 574 323 6 (Single rate)

Source: Autoridade Tributária 2019

Real estate taxes in Portugal: Stamp duty

If you are going to buy a house in Portugal, there are more real estate taxes in Portugal. One of them is the stamp duty. This tax is based on the amount stated on the deed. The buyer must pay a transaction tax of 0.8% at the signing of the deed.

If you resorted to a bank loan to pay for the house you will also have to pay stamp duty of 0.6% on the amount of the loan.      

Property tax

Besides the taxes you pay at the time of the purchase, there is a tax you will have to pay every year for as long as you own the property, which is the municipal property tax (IMI).      

The IMI rates are set annually by the council where the real estate is located. In cases of urban buildings the rate can vary between 0.3 and 0.45%, whereas with rustic buildings the rate is 0.8%.

Lisbon, where 45% of the French community in Portugal lives, charged the minimum 0.3% rate in 2018. Further North, Porto opted for 0.324% and in Braga the IMI rate varies between 0.3% and 0.35%, depending on which council you are in. 

Further south, in the Algarve, the highest rates are charged in the councils of Vila Real de Santo António, Castro Marim and Portimão, with 0.45%.

You don’t need to pay all at once

There are more real estate taxes in Portugal. For instance, the IMI, which despite being an annual tax, but you don’t need to pay it all at once, although you can, if you so prefer. The tax office sends out letters in April for the tax to be paid during the month of May. When the amount is above 100 euros and below 500, you can pay in two instalments, in May and November. If it is above 500 euros you can pay in three instalments: May, August and November. 

You can also pay through direct debit. To do so, you should go to the tax office website, or to a local desk. With this option you make sure you don’t miss the deadlines and pay a fine.      

Now that you know what are the real estate taxes in Portugal, find out about the conditions for bank loans at NOVO BANCO. You can also learn about the advantages of the NB Golden Key account for people who are moving to Portugal.  

   

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