Source: Adobe Stock Author: Redaction Transfer tax varies by country Property taxes begin as soon as a home is purchased. Among European countries, Belgium has one of the highest property transfer taxes, with rates that can reach 12.5%, depending on the region. It is followed by England, the Netherlands and Luxembourg, while in Portugal the maximum IMT rate is 8%. Despite these high rates, some countries offer tax benefits for certain buyers or types of housing. On the other hand, Estonia and Czechia do not charge transfer tax, while Lithuania applies a reduced rate. Among the countries analysed, Portugal ranks among those where this tax has the greatest impact. Annual property tax and rental income Property taxes during ownership also vary considerably. In Portugal, IMI ranges between 0.3% and 0.8%, while Spain has one of the highest maximum rates in Europe. Belgium, Germany, the United Kingdom, France and Lithuania also impose significant property taxes. Cyprus and Malta, on the other hand, do not levy an annual property tax. Rental income taxation also differs substantially. Denmark has the highest tax burden on lower rental income, followed by the Netherlands and Finland. For higher rental income, Belgium, Denmark, Germany and Greece apply some of the highest rates. In Portugal, rental income is currently taxed at 25%, with reductions available in certain cases. Capital gains also increase the tax burden When selling a property, property taxes include capital gains taxation. Denmark has one of the highest tax burdens, followed by Luxembourg and Germany, although Germany grants an exemption for properties held for more than ten years. Among the most favourable systems are Malta, North Macedonia and Romania, where taxation is significantly lower. Portugal occupies a mid-range position among the countries analysed, with capital gains tax reaching up to 24%. Portugal remains in the middle of the ranking The comparison of tax burdens highlights significant differences across Europe. Belgium stands out as one of the countries where property taxes are highest, considering purchase, ownership and rental. Conversely, Cyprus and Malta offer a more favourable tax framework for property owners. For anyone planning to buy, sell or invest in property, understanding each countrys tax system is just as important as assessing the propertys price, since taxes can significantly affect the overall cost of the investment.
Source: Adobe Stock Author: Redaction Tax Authority acknowledges errors in IMI collection The Portuguese Tax Authority (AT) will refund IMI property tax wrongly charged in 2025 to owners with residential tenancy agreements signed before 1990. The decision follows the identification of errors in the application of the tax exemption established by law for these types of contracts. Landlords who have already paid the full amount of the tax will receive a refund. Where payment is being made in instalments, the correction will be reflected in the following tax assessments, automatically adjusting the outstanding amounts. Exemption remains valid without a new application The IMI exemption for tenancy agreements signed before the New Urban Lease Regime (NRAU) came into force on 1 January 2024 and applies as long as the legal conditions continue to be met. Even so, several property owners received 2025 IMI tax assessments this year despite having already been granted the exemption the previous year. The situation led to complaints from landlords. In some cases, the tax assessments were corrected, while in others a new exemption application was requested, although the legislation does not require annual renewal of this tax benefit. Refunds will reach property owners Due to the lack of clarification, many property owners chose to pay the tax within the legal deadline to avoid penalties. The Tax Authority now clarifies that anyone who applied for the exemption in 2024 does not need to submit a new application in subsequent years. The authority confirms that the tax benefit remains valid throughout the duration of the eligible contracts, provided the legal requirements continue to be met. As a result, the amounts wrongly charged in 2025 will be refunded or offset against future tax assessments, depending on each taxpayers situation.
Source: Adobe Stock Author: Redaction IMI and Stamp Duty declarations are now pre-filled The Portuguese Tax and Customs Authority (AT) has begun providing pre-filled IMI and Stamp Duty declarations, a measure included in the investments of the Recovery and Resilience Plan (PRR) aimed at the digital transformation of Public Administration. The objective is to simplify tax procedures, reduce filing errors and make the relationship between taxpayers and the tax administration more efficient. The new measure was presented during a session dedicated to the digital transformation of property taxes, organised by the Ministry of Finance. Among the main outcomes of the investments are the modernisation of information systems, the strengthening of technological infrastructure and the creation of new digital features to facilitate compliance with tax obligations related to property. Digitalisation strengthens Tax Authority services In addition to the pre-filling of IMI and Stamp Duty declarations, the AT highlighted the digitalisation of a large part of the paper documentation associated with rural land registers. This process improves information management, speeds up document consultation and increases the efficiency of services. The modernisation also includes enhanced interoperability between public bodies, allowing greater information sharing among different State entities. One of the examples presented is the connection with the Institute for Mobility and Transport (IMT), facilitating the exchange of data required for various administrative procedures. Citizen Card to include a technical code As part of the same digitalisation strategy, an ordinance has been published establishing the association of a technical code with the Citizen Card. This code is issued and managed throughout the documents lifecycle and is intended to strengthen interoperability between public services. According to the new rules, reading the technical code does not provide access to the holders remaining personal data, making only the information authorised by the citizen available. The measure also provides for a connection between the Institute of Registries and Notaries (IRN) and the State Technological Reform Agency (ARTE), which is responsible for managing the technical code. The availability of this information to other entities will depend on compliance with the legislation in force and the existence of the technical mechanisms required to ensure secure interoperability. With these measures, the Government aims to accelerate the digitalisation of public services, simplify property-related procedures and strengthen the security of information sharing between State entities.
Source: Adobe Stock Author: Redaction h3 { margin-top: 0.25cm; margin-bottom: 0.21cm; direction: ltr; color: #000000; orphans: 2; widows: 2; background: transparent; page-break-after: avoid }h3.western { font-family: Liberation Serif, Times New Roman, serif; font-size: 14pt; so-language: pt-PT; font-weight: bold }h3.cjk { font-family: Noto Serif CJK SC; font-size: 14pt; so-language: zh-CN; font-weight: bold }h3.ctl { font-family: Lohit Devanagari; font-size: 14pt; so-language: hi-IN; font-weight: bold }p { margin-bottom: 0.25cm; direction: ltr; color: #000000; line-height: 115%; orphans: 2; widows: 2; background: transparent }p.western { font-family: Liberation Serif, Times New Roman, serif; font-size: 12pt; so-language: pt-PT }p.cjk { font-family: Noto Serif CJK SC; font-size: 12pt; so-language: zh-CN }p.ctl { font-family: Lohit Devanagari; font-size: 12pt; so-language: hi-IN } AIMI taxpayers exceed 100,000 The number of taxpayers paying the Additional Municipal Property Tax (AIMI) has surpassed, for the first time, the 100,000 mark, reaching 101,820 people last year. This growth represents an 8.9% increase compared with the previous year, according to data from the Tax and Customs Authority. The rise reflects a broader reach of AIMI, which continues to apply mainly to higher-value real estate assets. Among taxpayers, companies stand out as the most representative group, although the number of households has also increased significantly. More taxed properties and higher tax revenue AIMI applied to a total of 613,618 properties, representing a 7.4% increase compared with the previous year. This growth contributed to higher tax revenue, reaching €176.15 million. Companies continue to bear the largest share of the tax, although individual taxpayers, including undivided inheritances, grew by 22% to 19,002. Companies increased by 6%, totalling 82,818 taxpayers. The expansion of the AIMI tax base reflects not only the appreciation of real estate assets, but also the impact of tax rules linked to high-value properties.
Source: Adobe Stock Author: Redaction European pressure on housing taxation The European Commission advocates a review of housing taxation in Portugal as a response to the shortage of supply and the high number of vacant or underused homes. The recommendation involves updating property taxable values, which could lead to an increase in the Municipal Property Tax (IMI). The main objective is to make the ownership of unused properties more costly, encouraging owners to place these homes on the rental or sales market. This approach also aims to improve the efficiency of the housing market and address the imbalance between supply and demand, especially in urban coastal areas. Higher IMI and a shift in tax policy According to EU guidance, Portugal should move from a tax system focused on transaction taxes, such as IMT, towards a model based more on recurring property taxes. This change would be supported by an update of taxable property values, which in many cases do not reflect current market prices. The European Commission believes this change could contribute to greater residential mobility while reducing the incentive to keep properties outside the housing market. In parallel, it suggests the creation of temporary support for more vulnerable families, in order to mitigate the social impact of a potential tax increase. Structural pressure on Portugal’s housing market Brussels highlights that Portugal has recorded one of the highest cumulative increases in house prices over the past decade, with values more than doubling since 2015. This growth has worsened housing access difficulties, particularly in major urban areas. The report also notes a significant number of properties that are not used as primary residences, including vacant or dilapidated homes. This factor contributes to structural imbalances between supply and demand in the housing market. Despite increased investment in social housing supported by European funds, data points to significant delays in project execution, including under the Recovery and Resilience Plan. The European Commission therefore argues that, in addition to public investment, it is essential to strengthen the role of the private sector and alternative models, such as cooperative housing, in order to increase supply and improve housing access.
Source: Adobe Stock Author: Redaction Rental programme with low uptake The Lisbon Association of Landlords considers that bureaucracy and the complexity of processes are undermining the results of the affordable rental housing programme in Portugal. According to the organisation, the difficulty in submitting and approving applications, both from landlords and tenants, has discouraged participation in the scheme. At issue is the Rental Support Programme (PAA), created in 2019 with the aim of increasing the supply of more affordable housing, through tax incentives such as exemptions in IRS, IRC and IMI for landlords who charge rents below the market median. Bureaucracy and weak programme participation According to data referred to regarding the programme, there are around one thousand active contracts since its launch, a figure considered far below initial expectations. The goal of reaching a significant share of the market has fallen short, representing only a small percentage of the rental housing sector in Portugal. The association argues that this result mainly reflects the administrative complexity of the programme, which includes lengthy and unintuitive processes. From its perspective, landlords seek stability and predictability in the market more than isolated tax benefits, pointing to trust as a key factor for participation. Oversight, data and market impact Another critical issue relates to programme oversight. Despite the tax exemptions granted, there are concerns about monitoring compliance with the rules, particularly in cases where rents may exceed the defined limits. The lack of more effective control mechanisms raises doubts about the overall effectiveness of the scheme. The absence of automation in tax information processing is also highlighted, particularly in the completion of IRS declarations related to rental income, which requires additional steps from taxpayers, even though the information is already available to the tax authorities. In addition, the suspension of essential statistical data on the rental market makes it harder to track updated trends in rents. In a context of strong pressure on housing prices in Portugal, the lack of up-to-date information and the bureaucracy associated with support schemes are seen as additional obstacles to the development of affordable rental housing.
Source: Adobe Stock Author: Redaction Housing tax package published The housing tax package was published in the Diário da República and introduces a set of tax measures for the housing sector. The objective of the housing tax package is to increase supply and boost investment in the real estate market. Among the main changes of the housing tax package is the removal of the 12-month residence requirement to maintain the 6% VAT rate on primary housing. According to the decree, tax benefits become more flexible, reducing penalties and adjusting VAT rules for construction and renovation. 6% VAT on construction and renovation The housing tax package maintains the reduced VAT rate of 6% on construction and renovation of properties intended for primary and permanent residence or rental housing. The housing tax package establishes that there will be no refund of the tax benefit if the residence ceases to be permanent within 12 months. To benefit from the 6% VAT, the housing tax package sets that properties must be sold within a maximum of 24 months after the occupancy licence, with an explicit reference in the purchase deed. Works covered by the housing tax package include licensing between 2025 and 2029. The 6% VAT under the housing tax package comes into effect from 1 July 2026, with phased implementation rules. Rental and income tax benefits The housing tax package includes measures reducing income tax and corporate tax on rental income, applicable to moderate rents of up to around 2,300 euros. The housing tax package also provides reduced tax rates for landlords entering rental agreements within these limits. Among the measures of the housing tax package is the gradual increase of rent deductions in income tax, as well as the exemption of capital gains taxation when reinvested in rental housing. The housing tax package also creates the Simplified Affordable Rental Scheme, with rents calculated based on the municipal median, reinforcing the role of the housing tax package in market regulation. Real estate investment incentives The housing tax package also introduces Investment Contracts for Rental Housing, with tax benefits of up to 25 years. The housing tax package includes exemptions from property transfer tax, reductions in municipal property tax and incentives for construction and renovation of rental properties. According to the decree, the housing tax package aims to stimulate private investment and increase housing supply. Most measures of the housing tax package enter into force in phases, with retroactive effects from 2026 in several components. The housing tax package is presented as a structural response to the housing crisis, seeking to balance tax incentives and increased supply in the Portuguese real estate market.
Source: Adobe Stock Author: Redaction Deadline for the first IMI instalment is ending The deadline for paying the first instalment of IMI is coming to an end and property owners have only a few days left to meet this tax obligation. Under normal conditions, IMI must be paid by 31 May, but in 2026 this deadline for the first instalment of IMI is automatically moved to 1 June, as the original date falls on a Sunday. After receiving the tax notice or checking the IMI amount on the tax authority portal, property owners must ensure payment is made within the set deadline. IMI applies to housing, land and other properties, and is one of the most relevant annual taxes for those who own real estate assets in Portugal. IMI payment brackets in 2026 IMI payment depends on the total tax amount. When IMI is below 100 euros, payment is made in a single instalment, which this year must be settled by 1 June. If IMI is between 100 and 500 euros, the amount is split into two instalments. The first IMI instalment must be paid in early June, while the second can be settled by the end of November. For IMI amounts above 500 euros, the tax is divided into three instalments throughout the year: June, August and November. When IMI is below 10 euros, there is no charge from the Tax Authority. This IMI bracket system allows the payment to be adjusted to the amount due, making financial management easier for property owners. IMI exemptions and calculation in Portugal Not all property owners pay IMI in Portugal, as there are several exemption situations provided by law. In some cases, primary permanent housing may benefit from temporary exemption, especially when the property’s taxable value is below certain thresholds. There are also IMI exemptions for lower-income households, as well as for specific situations related to long-term rental housing or older rental regimes. These conditions allow IMI to be reduced or eliminated in certain cases. To help with planning, many property owners use IMI simulators, which allow them to calculate the amount payable based on the property, municipality and applicable local tax rates. IMI varies depending on location and property type, so it is essential to understand the rules to avoid surprises in the annual budget.
Source: Adobe Stock Author: Redaction IMI 2026: distribution of rates across municipalities In 2026, most Portuguese municipalities will apply the minimum IMI rate, maintaining stability for most property owners. Of the 308 municipalities, only 37 announced changes: 31 decided to reduce rates and only six opted for increases. This decision reflects the intention to balance local finances while supporting families in the face of housing costs. IMI is an annual tax levied on properties, with rates set by municipalities between 0.3% and 0.45% for urban properties, while rural properties maintain a fixed rate of 0.8%. Among the municipalities increasing IMI in 2026, some cases stand out in the Lisbon district, where rates on urban properties rise from 0.3% to 0.35% or 0.45%. There are also increases in municipalities in other districts, reflecting specific adjustments to municipal revenues. On the other hand, 31 councils decided to ease the IMI burden by applying reductions that will directly benefit household budgets. These reductions cover municipalities from north to south of the country, including major cities and smaller councils, demonstrating a widespread effort to contain the tax burden on taxpayers. Family discounts and payment rules In addition to maintaining or reducing rates, most municipalities will once again grant the family IMI in 2026. This discount allows the tax payable to be reduced according to the number of dependent children, with fixed amounts that vary by household: one child entitles the household to a €30 discount, two children €70, and three or more children €140. Each council defines its own rules, and the discount may apply from the first child or only to families with three or more dependants. The family IMI is granted automatically, provided the property is the household’s main and permanent residence and all household members have their tax address registered at the property, in addition to dependants being under 25 years old and having no income. IMI payment remains unchanged. The tax is charged annually, with notification sent by the Tax Authority in April and payment starting in May. For amounts up to €100, the tax is paid in full in May. Amounts between €100 and €500 may be paid in two instalments, in May and November. Amounts above €500 may be paid in three instalments: May, August and November. This structure facilitates household budget management, allowing the IMI impact to be spread throughout the year. Outlook and impact of IMI in 2026 The outlook for 2026 confirms that IMI will continue to be a relevant tax in household budget management, but most municipalities have chosen containment policies, maintaining the minimum rate and applying family discounts. Councils that increased the tax reflect specific revenue adjustments, but they represent a minority nationwide. The balance between maintaining municipal revenues and supporting families is evident, allowing most property owners to avoid significant changes in the tax payable. For 2026, IMI remains an important fiscal instrument, balancing the need for municipal funding with the protection of families’ disposable income. Close monitoring of municipal rates and application of the family IMI ensure that property owners can plan their annual budgets more securely, while municipalities secure resources for local services. IMI therefore continues to play a central role in the relationship between local authorities and citizens, ensuring financial sustainability and fiscal fairness across the country.
Source: Adobe Stock Author: Redaction Construction value rises in IMI 2026 IMI 2026 brings a relevant update to the average construction value per square metre, which increases from 532 euros to 570 euros. This 38-euro rise marks the first increase since 2023 and will have a direct impact on the calculation of the Municipal Property Tax applied to urban buildings in Portugal. The construction value is one of the central elements in determining the taxable asset value, serving as the basis for calculating IMI 2026. The update now defined reflects the evolution of costs associated with property construction and maintenance. How construction value influences IMI In the calculation of IMI 2026, the average construction value per square metre is combined with the value of the land plot. Under the rules in force, the base value of built properties corresponds to the construction cost plus 25% relating to the land. This formula means that any increase in construction value has a direct effect on the taxable asset value of properties, which may translate into a rise in IMI 2026 for some owners, especially in more recent homes or those subject to revaluation. Annual update defined by the Government The average construction value used in IMI 2026 is set annually by the Government, based on a proposal from the National Commission for the Evaluation of Urban Properties. This process involves consultation with official bodies and property sector associations, ensuring that the defined value reflects market reality. The last update took place in 2023, when the value rose to 532 euros. During 2024 and 2025, the amount remained unchanged, making the increase planned for IMI 2026 particularly significant after two years of stability. Impact of IMI 2026 on the property market The update to the construction value for IMI 2026 purposes comes in a context of high costs in the property sector, influenced by inflation, construction materials and labour. Although it does not automatically imply a generalised tax increase, it may lead to IMI revisions for properties assessed or reassessed in 2026. For owners, investors and developers, IMI 2026 reinforces the importance of monitoring property valuations and understanding how construction value influences the tax burden. This update contributes to a taxation system more aligned with economic reality, but also requires greater financial planning in the property sector.
Source: Adobe Stock Author: Redaction h3 { margin-top: 0.25cm; margin-bottom: 0.21cm; direction: ltr; color: #000000; orphans: 2; widows: 2; background: transparent; page-break-after: avoid }h3.western { font-family: Liberation Serif, Times New Roman, serif; font-size: 14pt; so-language: pt-PT; font-weight: bold }h3.cjk { font-family: Noto Serif CJK SC; font-size: 14pt; so-language: zh-CN; font-weight: bold }h3.ctl { font-family: Lohit Devanagari; font-size: 14pt; so-language: hi-IN; font-weight: bold }p { margin-bottom: 0.25cm; direction: ltr; color: #000000; line-height: 115%; orphans: 2; widows: 2; background: transparent }p.western { font-family: Liberation Serif, Times New Roman, serif; font-size: 12pt; so-language: pt-PT }p.cjk { font-family: Noto Serif CJK SC; font-size: 12pt; so-language: zh-CN }p.ctl { font-family: Lohit Devanagari; font-size: 12pt; so-language: hi-IN } h3 { margin-top: 0.25cm; margin-bottom: 0.21cm; direction: ltr; color: #000000; orphans: 2; widows: 2; background: transparent; page-break-after: avoid }h3.western { font-family: Liberation Serif, Times New Roman, serif; font-size: 14pt; so-language: pt-PT; font-weight: bold }h3.cjk { font-family: Noto Serif CJK SC; font-size: 14pt; so-language: zh-CN; font-weight: bold }h3.ctl { font-family: Lohit Devanagari; font-size: 14pt; so-language: hi-IN; font-weight: bold }p { margin-bottom: 0.25cm; direction: ltr; color: #000000; line-height: 115%; orphans: 2; widows: 2; background: transparent }p.western { font-family: Liberation Serif, Times New Roman, serif; font-size: 12pt; so-language: pt-PT }p.cjk { font-family: Noto Serif CJK SC; font-size: 12pt; so-language: zh-CN }p.ctl { font-family: Lohit Devanagari; font-size: 12pt; so-language: hi-IN } Reduction of IMI for urban buildings The Municipal Council of Loures approved a reduction of the IMI rate for urban buildings, from 0.362% to 0.361%. The so-called “family IMI” remains, providing discounts for households with dependents: €30 for one dependent, €70 for two, and €140 for three or more. The IMI rate in Portugal can vary between 0.3% and 0.45%, with municipalities setting the rate within this range. The measure in Loures represents an estimated revenue decrease of €820,000 but aims to support families and make the municipality more attractive for housing. IRS share and fiscal impact Regarding IRS, the participation rate drops from 4.70% to 4.65%, staying below the maximum limit of 5%. This reduction aims to balance the tax burden for taxpayers, contributing to higher disposable income for families and encouraging local spending. At the same time, the Council approved the creation of a municipal surcharge of 1.5% on the taxable profits of companies with a turnover above €150,000, keeping smaller businesses exempt. This measure helps fund municipal services without penalising small enterprises. Benefits for residents and businesses The combination of IMI reduction, IRS share adjustment, and the surcharge aims to support both families and businesses in Loures. Families benefit from lower taxes, while medium and large companies contribute proportionally, ensuring the municipality’s financial sustainability. These changes reflect the concern to balance municipal revenue with direct support for taxpayers, promoting residency, investment, and local economic activity. Adjusting the rates seeks to make Loures more competitive and attractive for housing and business, with positive impacts on residents’ daily lives and the municipality’s economic development.
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