Taxation

1. IMT (Imposto Municipal sobre Transmissões Onerosas de Imóveis) - Property Transfer Tax:

• The IMT is levied on the purchase price or on the property tax’s value, whichever is greater.
• Residential Property: The IMT rate varies depending on the property's value and whether it is a primary or secondary residence. For primary residences, the rates range from 0% to 7.5%, while for secondary residences, the rates range from 1% to 7.5%.
• Rustic land: a flat rate of 5% applies;
• Non-Residential Property: a flat rate of 6.5% applies.
• There is a sliding scale for primary residences, starting at 0% for properties up to €101,917 and going up to 7.5% for properties over €1,102,920 (2024 values).

2. Stamp Duty (Imposto do Selo):

• This is a fixed rate of 0.8% on the purchase price of the property or on the property’s tax’s value, whichever is greater.

3. Notary and Registration Fees:

• These fees vary but typically range from a few hundred to over a thousand euros. They cover the cost of the notary public and the registration of the property with the Land Registry.

1. IMI (Imposto Municipal sobre Imóveis) - Annual Municipal Property Tax:

• This tax is levied annually based on the property's tax value (Valor Patrimonial Tributário). The rates typically range from 0.3% to 0.45% for urban properties, depending on the municipality. Rural properties are taxed at 0.8%.

2. AIMI (Adicional ao Imposto Municipal sobre Imóveis (AIMI) – Additionial Annual Municipal Property Tax:

• This sliding tax of 0.7% - 1.5% is additional to IMI and is levied on the property’s tax value in case a person has a real estate patrimony larger than 600,000 euro.

1. Capital Gains Tax (CGT):

• Residents: For individuals considered residents in Portugal, 50% of the capital gain is taxable. The gain is added to other income and taxed at the applicable income tax rates (IRS)
• Non-Residents: Non-residents are taxed similar to residents, taking into account the person’s global income
• Primary Residence Exemption: If the property sold is the seller’s primary residence and the proceeds are reinvested in another primary residence in Portugal or the EU/EEA within 36 months, the gain may be exempt from tax.
• Alojamento Local: a specific tax regime apply in case the property has been used for short term holidays in the last 3 years.

2. Calculation of Capital Gains:

• Capital gains are calculated as the difference between the sale price and the acquisition cost, adjusted for inflation and any documented property improvements.
• Certain deductions can be applied, such as costs related to the acquisition and sale of the property (notary, registration fees, and real estate agent commissions).

3. Reporting and Payment:

• Capital gains must be declared in the annual income tax return for the year in which the property was sold.
• Taxes owed on the gain must be paid according to the payment schedule set by the Portuguese tax authorities.

1. IMT (Imposto Municipal sobre Transmissões Onerosas de Imóveis) - Property Transfer Tax*:

• Same as the Private Individual above unless the company is located in a tax haven (10%)

2. Stamp Duty (Imposto do Selo):

• Same as the Private Individual above

3. Notary and Registration Fees:

• Same as the Private Individual above

1. IMI (Imposto Municipal sobre Imóveis) - Annual Municipal Property Tax:

• Same as the Private Individual above, unless the company is located in a tax haven (7.5%)

2. AIMI (Adicional ao Imposto Municipal sobre Imóveis (AIMI) – Additionial Annual Municipal Property Tax:

•  AIMI of 0.4% is additional to IMI and is levied on the property’s tax value, unless the company is located in a tax haven (7.5%). If the property is residential and used by any of the shareholders, the AIMI for private individuals applies without any thresholds

1. Capital Gains Tax (CGT):

• Residents: 28% capital gains tax
• Non-Residents: according to the fiscal framework in the country of domicile

1. Capital Gains Tax (CGT):

• Resident company: according to the company tax rate in Portugal (17% - 21%)
• Non-Resident company: 25% capital gains tax