• Taxes

    What are the taxes on property in Portugal?

     Rental Income:

    When you have your property rented, you will be entitled to pay taxes on the income received, at a fixed rate of 28% on the annual income amount (25% if a legal person). Some expenses are deducted such as:

    • Condominium fees
    • Maintenance and current expenses
    • Annual IMI and other town hall charges
    • Repairs (appliances, plumbing, gas, electrical problems)

    Capital Gains Income Tax:

    When you resell your property, you will be paying a tax of 25% (fixed rate) on the generated gains (positive difference between selling and purchasing prices).

    IMI – Property Transfer Tax (Town Hall property taxes) 

    After ownership transfer, you will have an annual tax payment to the local tax office. IMI is based on the registered property value (generally registered value is below the price of acquisition) of both urban and rustic estates located within the administrative territorial limits. The applied tax rate varies according to the town where the good is located. Bellow you can check the IMI tax rates applied in different towns:


    Taxes on the acquisition :

    Acquisition taxes and fees apply to the purchasing price of the property, and the buyer is the party entitled to pay, as well as any registry and notarial expenses. There is no VAT on the acquisition of real estate in Portugal. Instead, there is IMT, a tax administered by the town hall.

    • Urban estate goods acquisitions:

    COLLECTIBLE INCOME

    MARGINAL TAX RATE

    AMOUNT TO DEDUCT

    Up to 92,407€

    1%

    0,00€

    Between 92,407€ and 126,403€ 

    2%

    924,07€

    Between 126,403€ à 172,348€

    5%

    4,716.16€

    Between 172,348€ and 287,213€ 

    7%

    8,163.12€

    Between 287,213€ and 574,323€

    8%

    11,035.25€

    Above 574,323€

    6%

    0,00 €

     Example:
    IMT Calculation:
    Good Value x Marginal Rate – Amount to Deduct;
    200.000€ x 7% - 8.163,12€ = 5.836,88€

     Rustic estate goods acquisitions:  5 %

    Acquisition of other urban goods and other onerous transactions:  6,5 %
    Offshore: The tax rate is 10% (fixed), with no exemption or reduction applicable whenever the buyer is a resident in a country with a more favourable tax system.

    Property Registration:

    To complete the purchasing act, it is necessary to convert the temporary registry (done at the time of the promissory contract) into a definitive registry at the “Conservatória do Registro Predial.” (The Land Registry Office)

    Cost of  “Caderneta Predial” (building book) – between €150,00 and €250,00

    Cost of deed (notary act) - €615.00

    Stamp Duty:

    This tax has a wide incidence scope, comprehending all acts, contracts, documents, books, papers and other issues enumerated on the Stamp Tax Table.

    - On the property acquisition price – 0,8%

    - On no-term warranties or with a 5 year or longer term (such as mortgages) - 0,6%.

    - On property goods of 1.000.000 euros or higher (registered value) – 1%, or 7,5% if the owner lives in a tax paradise.

    Note: All these taxes and corresponding tax rates are subject to annual variations. Talk to us for a simulation of your actual situation.