Buying property in Portugal? Know what taxes there are.

Portugal has a property tax known as the Imposto Municipal sobre Imóveis (IMI), which is levied annually for all properties located in Portugal, whether owned by a resident or non-resident. This tax is subject to variation from municipality to municipality, but generally is calculated on the cadastral value of the property. For residents, the tax rate is usually based on maximum tax rate allowed by law and for non-residents the maximum rate is higher. Certain exemptions and deductions are available. Additionally, property owners are allowed to deduct up to 10% of the tax due if they can prove that the property is their primary residence.

In Portugal, property taxes are calculated according to the value of the land and buildings and are generally divided into two types: the Municipal Property Tax (IMI) and the Stamp Duty Tax (IS).

The Municipal Property Tax (IMI) is calculated annually and has a progressive rate system, according to the value of the property. Essentially, the municipal authorities use the value of the building, land and other components of the property to set the rate. For properties that have a value from 0-92,407 Euros, then the maximum rate is 0.3%.

The Stamp Duty Tax (IS) is set at a flat rate of 6.5% for both residential and commercial properties. This tax is levied on the purchase and sale of a property. It is up to the purchaser to pay the tax, which is then transferred to the state.

It is important to note that some people in Portugal may be exempt from paying these taxes, such as EU nationals and those that own a secondary residence in Portugal. Additionally, those who are over 65 years of age or who earn a low income may also be exempt from paying some taxes depending on their circumstances. Portugal has a range of other exemptions and discounts to take into account as well. Additionally, the Portuguese government may reduce taxes or even exempt foreign individuals who are looking to invest in Portugal.