Property Taxes in Portugal

Investing in Portugal is not only a lifestyle decision — it’s a smart financial move. But before you sign on the dotted line for your dream home or investment property, it’s important to understand how property taxes in Portugal work. In this blog, we break down everything you need to know — from purchase to annual ownership — with insights tailored to U.S.-based buyers.

Why Portugal?

Portugal offers:

Affordable real estate prices compared to other EU countries
Favorable residency programs (D7, Golden Visa, Digital Nomad Visa)
High rental demand in areas like Porto, Lisbon, and the Algarve
Tax treaties between Portugal and the U.S. to avoid double taxation

But like any country, property taxes are part of the equation.

Overview of Property Taxes in Portugal

Tax	When Paid	What It Is
IMT (Imposto Municipal sobre Transmissões Onerosas de Imóveis)	One-time, at purchase	Property transfer tax
IS (Imposto do Selo)	One-time, at purchase	Stamp duty
IMI (Imposto Municipal sobre Imóveis)	Annually	Municipal property tax

1. IMT – Property Transfer Tax

IMT is a one-time tax paid when you buy real estate in Portugal. It’s calculated based on the purchase price or taxable value (whichever is higher).

IMT Rates for Residential Properties (Main Residence):

Property Price (€)	IMT Rate	Deductible Amount
Up to 97,064	0%	€0
97,065 – 132,774	2%	€1,941.28
132,775 – 181,034	5%	€5,708.21
181,035 – 301,688	7%	€9,087.19
301,689 – 603,289	8%	€12,775.75
Over €603,289	Flat 6% (non-residents) or 7.5% for 2nd homes

Example: If you buy a €500,000 property as your primary residence, your IMT will be around €28,000.

Note: If the property is for rental or investment, you may not qualify for the main residence deduction.

2. Stamp Duty (IS – Imposto do Selo)

Stamp duty is another one-time tax paid at the time of purchase.

Rate: 0.8% of the property’s purchase price

For a €500,000 home, the stamp duty is €4,000.

There are also additional stamp duties on mortgages and financial instruments, typically paid by the lender or borrower depending on the situation.

3. IMI – Annual Municipal Property Tax

IMI is like a local property tax paid yearly to the municipality where the property is located.

Property	Tax
Rate for urban properties	0.3% – 0.45% (depends on the municipality)
Rate for rural properties:	Fixed at 0.8%
Luxury properties or offshore owners	Can be taxed up to 7.5%

IMI is based on the VPT (Valor Patrimonial Tributário), which is the government’s assessed taxable value of the property — often lower than the market value

Example: If the VPT of your property is €300,000 and your municipal rate is 0.35%, you’ll pay €1,050 per year.

Payment Schedule

4. AIMI – Additional Wealth Tax (for high-value properties)

AIMI applies to individuals and companies who own property (or a share of it) worth more than €600,000

Owner Type	Property Value	AIMI Rate
Individuals	€600,000–€1 million	7%
Individuals	Over €1 million	1%
Companies / Offshore Entities All property values		0.4% or up to 7.5%

For couples, the exemption doubles to €1.2 million.

This is similar to a wealth tax and mostly impacts luxury property owners.

Property Tax for Rental Income

If you rent out your property:

You must declare rental income in Portugal

Standard tax rate: 28% flat for non-residents

You can deduct expenses like maintenance, management fees, and IMI

Portugal and the U.S. have a Double Taxation Agreement, meaning you won’t be taxed twice — just need to report to both IRS and Portugal’s Tax Authority.

Documents You’ll Need

01.

NIF (Portuguese Tax Number)

Required for any real estate transaction

02.

Fiscal Representative

(if you're a non-EU resident)

03.

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IMI and AIMI bills are usually sent by mail or available via the Portuguese tax portal.

How We Help at Invest in Porto

As your trusted real estate partner, Invest in Porto makes the tax side of investing in Portugal smooth and transparent. We offer: