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PROPERTY
TAXATION
PORTUGAL TAILORED TO BUYERS

A summary of the applicable taxes when buying, owning, selling or inheriting properties in Portugal.

IMT PROPERTY TRANSFER TAX

This tax must be paid upon the purchase of a property by the buyer, prior to the completion. The rate will vary on properties for habitational purposes, according to the purchase price.
For example, properties with a rateable tax value of over EUR 1m, a 7.5% rate will be applied.  The rate corresponds to 5% on rustic land and 6.5% on plots for building or other property types.
This rate includes the purchase of shares in companies that own real estate and, as of 2021, is applicable to the purchase of shares in corporations (“sociedade anónima – S.A.”). A 10% rate is also applied to properties purchased (directly or indirectly) by offshore entities included on Portugal ́s blacklist.

STAMP DUTY, NOTARY AND REGISTRATION FEES These fees must be paid by the purchaser before signing the notarial deed and the registration of the property, in the buyer’s name. Stamp duty is levied at a 0.8% rate of the sales price. The registration of the purchase amounts to EUR 250.00. Notary and lawyer fees will vary depending on the value of the purchase and complexity of the deal. IMI - ANNUAL PROPERTY TAX In the Loulé council the current tax is at 0.3%. A 7.5% rate is also applied where the property is held (directly or indirectly) by offshore entities which are included on Portugal ́s blacklist. This tax may be paid two or three instalments each year (according to the total value). The rate is fixed annually but
it can vary between 0.3% to 0.45% depending on the council where the property is located.

AIMI ADDITIONAL MUNICIPAL PROPERTY TAX

AIMI, introduced in 2017, refers to the combined total rateable value of properties (VPT), including all the properties owned by an individual.

It is not applicable for properties valued under EUR 600,000. For values between EUR 600,000 and EUR 1 million, the AIMI is 0.7%

On values from EUR 1 million up to 2 million the tax corresponds to EUR 2,800 (which is 0.7% of EUR 400,000) plus 1% on the excess value of EUR 1 million.

On values above EUR 2 million the tax is EUR 2,800 (0.7% of EUR 400,000) plus 1% on the excess value of EUR 1 million up to 2 million plus 1.5% on the value in excess the 2 million.

Corporate owned properties are subject to an AIMI of 0.4% of the rateable value. In similarity to IMI, there is also a 7.5% rate applied to real estate owned by offshore entities which are included on Portugal ́s blacklist.

INHERITANCE TAX There is no inheritance tax in Portugal, if it is between direct relatives or spouses.

A 0.8% stamp duty, based on the VPT, is calculated on gifts. Other inheritance or gift situations are subject to stamp duty at the rate of 10% of the VPT. CAPITAL GAINS TAX CGT is levied at a 28% rate for non- resident individuals. Residents are not taxed on 50% of their capital gain and the remaining 50% is added to their usual annual income tax return. This tax is calculated through the difference between the sales price and the cost of the purchase and/
or construction of the property, or its first rateable value, whichever is the highest.

Invoices regarding certain refurbishments, taxes, notary and registration fees as well as real estate agency fees may offset the costs against this tax. If you are selling your main residence and you reinvest
the proceeds of the sale within the following 36 months in an EU/EEA territory, then you can avoid this tax. CGT upon direct disposal of real estate properties is levied at a 25% rate, for non-residential companies. The taxable basis is determined in a similar form as established for resident individuals.

CGT also applies to resident companies, at rates that range between 21% and 31.5% (depending on the applicable State and municipal surcharges). A reinvestment relief regime can be potentially applicable, limiting the gains subject to tax (depending on certain criteria).

Depending on the specific holding of companies owning Portuguese real estate, Portuguese taxation on capital gains may or may not apply.

Sardo Luxury Real Estate can provide contacts for legal and tax advisors to provide specific assistance.

PRIVATELY OWNED PROPERTY TAXES ON

IMT – PROPERTY PURCHASE TAX

  • 5% rustic land
  • 6.5% plots for construction and others
  • 7.5% properties for habitation

CAPITAL GAINS TAX

  • 28% on the gain in Portugal for non-residents (Residents in Portugal are not taxed on 50% of their capital gain and the other 50% is added to their usual annual income tax return)

IMI – PROPERTY TAX

  • 0.3% to 0.45%
  • 0.8% rustic Land

AIMI – ADDITIONAL MUNICIPALITY ANNUAL PROPERTY TAX

  • Up to EUR 600,000 – No AIMI tax
  • EUR 600,000 to 1m – 0.7%
  • EUR 1m to 2m – EUR 2,800 + 1% on the value above EUR 1m
  • Above EUR 2m – EUR 2,800 + 1% on the value up to 2m + 1.5% on the value in excess of EUR 2m

OTHER PURCHASE COSTS

  • 0.8% stamp duty
  • EUR 250 for registration fees
  • Notary and lawyer fees will vary
    depending on the value of the purchase and complexity of the deal

ANNUAL RUNNING COSTS OF THE COMPANY

  • None

ANNUAL FISCAL
REPRESENTATION

  • Around EUR 250*

*Estimated amount, subject to the complexity involved.

CORPORATE OWNERSHIP TAXES ON (NON-RESIDENT COMPANIES)

IMT – PROPERTY PURCHASE TAX

  • No IMT for the purchase of shares in non-resident companies
  • 6.5% for the purchase of shares in Portuguese companies that own Portuguese real estate (depends on certain criteria)
  • 10% for acquisition by offshore entities (or entities controlled by them) included on the Portuguese blacklist

CAPITAL GAINS TAX

  • 25% if the property is sold outside of the company
  • 28% for UBO if the shares are sold; subject to the double treaty taxation between PT and country of residence of the UBO

IMI – PROPERTY TAX

  • 0.3% to 0.45%
  • 0.8% rustic land
  • 7.5% for real estate held (directly or indirectly)
    by offshore entities included on Portugal ́s blacklist

AIMI – ADDITIONAL MUNICIPALITY ANNUAL PROPERTY TAX
Provided the property is attributed to the personal use of its shareholders and directors, (as well as direct family members):

  • 0.7%
  • 1% on tax value above EUR 1m
  • 1.5% on tax value above EUR 2m
  • 7.5% on properties held by offshore entities
    included on Portugal ́s blacklist

OTHER PURCHASE COSTS

  • No stamp duty
  • No registration fees
  • 1 to 2% legal fees

ANNUAL RUNNING COSTS OF THE COMPANY

  • EUR 1,500 – 4,500*

ANNUAL FISCAL
REPRESENTATION

  • EUR 550*

* Estimated amount, subject to the complexity involved.

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