Property Taxes & FAQ in Portugal – Forvis Mazars Guide
In collaboration with Forvis Mazars, we have compiled the main questions about property taxation in Portugal for investors and foreign owners.
For further information, you can contact the specialists listed below directly.
Frequently Asked Questions / FAQ:
1. What taxes apply when purchasing property in Portugal as a foreign buyer?
When you buy property in Portugal, the main tax to consider is the Property Transfer Tax, known as IMT (Imposto Municipal sobre Transmissões Onerosas de Imóveis). You’ll also pay Stamp Duty at a flat rate of 0.8% on the purchase price. After the purchase, owners pay an annual Municipal Property Tax (IMI – Imposto Municipal sobre Imóveis), set by the local council. These taxes apply to Portuguese and foreign buyers. You should also budget for other costs, such as notary and registration fees.
2. Are there any differences in taxation for residents and non-residents when buying or owning property in Portugal?
In general, no. The taxes applied when buying and owning property are the same for residents and non-residents, even though some reliefs may apply to residents buying their family home.
3. What is IMT (Property Transfer Tax), and how is it calculated?
IMT is a tax you pay when the ownership of a property changes hands. It must be paid before the deed is signed. The amount depends on the purchase price, the property’s nature (urban or rural), and how you intend to use it (main home or secondary one). Rates range from 1% to 8% and are applied to the higher of the purchase price or the property’s taxable value (VPT – Valor Patrimonial Tributário). Properties bought by companies in “blacklisted” jurisdictions may face a flat 10% rate.
4. Do I have to pay annual property taxes in Portugal, and how much are they?
Yes. All property owners pay IMI each year, based on the VPT value set by the tax authorities. For urban properties, rates usually range from 0.3% to 0.45%, and for rural properties up to 0.8%. Each municipality sets its own rate within these limits. Properties owned by companies in blacklisted jurisdictions may face a 7.5% rate. IMI is normally paid in one to three instalments, depending on the total amount due.
5. What are the tax implications of renting out my Portuguese property to holidaymakers or long-term tenants?
Long-term rentals are generally taxed at a flat 25% on rental income, with certain expenses (like maintenance and property tax) deductible. Short-term holiday lets are treated as a business activity — you’ll need to register as self-employed, and typically 35% of your gross income is taxed at progressive rates under the simplified regime. Short-term rentals also require compliance with local tourism rules and licences.
6. Am I subject to capital gains tax if I sell the property in the future?
Yes. Under the current rules, both residents and non-residents are taxed the same way: only 50% of the gain is taxable, and that amount is added to your other income and taxed at the progressive rates (12.5% to 48% in 2025). These rules replaced the previous system, which taxed non-residents differently.
7. How are foreign buyers taxed on Portuguese rental income in their home country?
Portugal taxes rental income from Portuguese property at a general flat rate of 25% for non-residents. Whether you also pay tax in your home country depends on its laws and any double taxation treaty with Portugal. In most cases, a treaty allows you to claim a tax credit in your home country for the Portuguese tax paid.
8. Can I benefit from any tax incentives or regimes, such as the NHR (Non-Habitual Resident) regime?
The old NHR regime ended and was replaced by IFICI (Incentivo Fiscal à Investigação Científica e Inovação), often called “NHR 2.0”. It targets professionals in high value-added fields, such as scientific research, innovation, and qualified technical services, who move to Portugal for work or investment. It can give a 20% flat rate on certain Portuguese-sourced earnings and exemptions on most foreign-sourced income (except pensions and income deriving in blacklisted jurisdictions) for 10 years. Eligibility rules are stricter than before, so professional advice is crucial.
9. Are there inheritance or gift taxes on Portuguese property?
Portugal has no separate inheritance or gift tax. Instead, Stamp Duty applies at 10% on the value transferred. Transfers between close family members (spouses, children, parents) are generally exempt.
10. Do I need to appoint a fiscal representative or obtain a Portuguese tax number (NIF)?
Yes. You’ll need a Portuguese tax number (NIF) to buy property. Non-residents outside the EU usually also need a fiscal representative, who acts as your point of contact with the tax authorities and ensures you meet your obligations.
Note: This content is for informational purposes and does not replace individualized professional advice:
Contact for further information:
Bernardo Masteling Pereira (Partner) – bpereira@mazars.pt
Mário Patrício (Senior Manager – Tax) – mpatricio@mazars.pt
Forvis mazars - Website: https://www.forvismazars.com/pt/en
