Source: Adobe Stock Author: Redaction Public guarantee can make borrowing easier The public guarantee allows banks, in certain circumstances, to finance up to 100% of the purchase value of a first permanent home. The aim is to reduce one of the main obstacles faced by those looking to buy a home: raising the money needed for the initial deposit. However, this measure does not mean that the State provides the mortgage loan. The loan is still granted by the bank, which assesses the buyers income, employment stability, debt-to-income ratio, credit history and other financial commitments. Therefore, even with a public guarantee, buyers must demonstrate that they can afford the repayments throughout the loan term. Tax exemption reduces initial costs In addition to the financing guarantee, there are tax benefits for young people buying their first permanent home. Provided they meet the applicable requirements, buyers may benefit from an exemption from IMT and Stamp Duty on the purchase of the property. The latter is equivalent to 0.8% of the purchase price. However, the exemption does not cover all taxes associated with the transaction. Stamp Duty on bank financing, corresponding to 0.6% of the amount financed, is still payable, as are other costs related to the purchase. How much can a young buyer save? Imagine buying a home for €220,000. Without these support measures, a 90% mortgage would generally require around €22,000 for the deposit, in addition to taxes and other costs associated with the deed. With the public guarantee, and provided the applicable conditions are met, the buyer may be able to obtain financing of up to 100%, significantly reducing the amount of their own capital required. The possible exemption from IMT and Stamp Duty on the purchase can further reduce the initial costs. However, there are still costs associated with the financing and completing the purchase. Support does not eliminate borrowing costs Despite the assistance available, buying a home remains a long-term financial commitment. Monthly repayments, insurance associated with the mortgage loan and other costs should be taken into account before proceeding. The maximum amount the bank is willing to finance does not necessarily mean that it is the most suitable amount for the household budget. A lower monthly payment can provide greater financial flexibility for unexpected expenses and savings. The support measures can therefore make it easier for young people to access their first home, but it is important to carefully assess the financing conditions and the ability to cover the costs over the years.
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 What are IMT and Stamp Duty? When buying a home, in addition to the property price and the deposit for a mortgage, it is essential to take into account the mandatory taxes associated with the deed. The main ones are IMT and Stamp Duty, which form part of the total cost of the purchase. IMT is payable whenever ownership of a property is transferred through a sale, while Stamp Duty applies to the purchase and, where financing is involved, also to the amount of the mortgage loan. Understanding these obligations helps you plan your budget and avoid unexpected expenses. How are these taxes calculated? IMT is calculated based on the higher of the purchase price or the propertys Taxable Asset Value (VPT). The applicable rate varies according to the propertys location, its intended use and the type of property, with tax brackets updated annually. Stamp Duty on the purchase is charged at a rate of 0.8% on the higher of the purchase price or the VPT. If you take out a mortgage, an additional Stamp Duty of 0.6% is charged on the loan amount for contracts with terms longer than five years. Are there IMT exemptions? In certain situations, the law provides for an IMT exemption. One of the most common applies to the purchase of a primary residence, provided the propertys value falls within the legal thresholds in force. There may also be tax benefits for properties intended for urban regeneration within Urban Rehabilitation Areas (ARU), provided the legal requirements are met. Companies purchasing properties for resale may also benefit from specific tax regimes, provided they comply with the applicable rules. When must these taxes be paid? IMT and Stamp Duty relating to the purchase must be paid before or on the day of the deed, using the respective payment documents issued through the Portuguese Tax Authoritys online portal. Without proof of payment, the deed cannot be completed. In the case of Stamp Duty on a mortgage, the amount is usually collected by the bank when the loan funds are made available. Including these costs in your financial planning is essential to avoid unexpected expenses and ensure a smoother home purchase.
Source: Adobe Stock Author: Redaction 6% VAT strengthens support for urban regeneration Parliament has approved, in principle, the bill that clarifies the application of the reduced 6% VAT rate to construction works carried out in Urban Rehabilitation Areas (ARU), even where there is no Urban Rehabilitation Operation (ORU). The proposal received the support of all parties represented in Parliament and will now proceed to detailed committee discussion. The measure aims to strengthen incentives for urban regeneration by promoting the refurbishment of old and deteriorated buildings, particularly in urban areas where housing pressure continues to increase. Measure will have retroactive effect from 2008 The bill establishes an interpretation of the legislation governing the application of the 6% VAT rate to urban regeneration, determining that the tax benefit may apply retroactively to 2008. The initiative seeks to clarify how the rule should be applied, eliminating doubts that have led to differing interpretations over recent years while providing greater legal certainty for property owners, developers and companies in the sector. Amendment addresses disputes with the Tax Authority In recent years, the application of the reduced VAT rate to urban regeneration has led to several disputes between taxpayers and the Tax Authority. Although an Urban Rehabilitation Area may be designated independently since 2012, the tax administration later began requiring the approval of an Urban Rehabilitation Operation as well in order to recognise the tax benefit. That interpretation resulted in additional VAT assessments on works that had already been completed, applying the standard rate instead of the reduced rate. With the approval of this bill, Parliament intends to standardise the application of the legislation and strengthen confidence in investment in urban regeneration projects
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 6% VAT and new penalty rules Anyone purchasing a home with the benefit of 6% VAT on construction or renovation of primary and permanent housing will no longer have to repay this tax incentive if they later stop living in the property. However, the 6% VAT regime is now linked to a new IMT penalty. Under the new 6% VAT rules, if the property is not used as a permanent residence within six months or ceases to be so within the first year, the buyer may face a 10% increase on the taxable value of the property. This change replaces the obligation to refund the VAT benefit with an alternative tax penalty. Conditions for applying 6% VAT The 6% VAT regime applies to properties intended for primary and permanent housing or rental housing with moderate rents. To benefit from 6% VAT, the property must be sold within a maximum of 24 months after the occupancy licence is issued, and this condition must be stated in the purchase deed. The 6% VAT applies to urban development operations started between September 2025 and December 2029, with phased implementation. In the case of rental, 6% VAT requires the property to be maintained for at least 36 months and rent limits of up to 2,300 euros per month. IMT, rental and exceptions Under the new 6% VAT framework, the 10% IMT penalty does not apply in exceptional situations such as marriage, cohabitation, divorce or an increase in household size. The 6% VAT regime therefore allows some flexibility in duly justified cases. In addition to 6% VAT, the tax package includes income tax reductions for rental income, incentives for long-term rental, and investment incentives in real estate. The 6% VAT coexists with more favourable taxation rules for landlords and investors. Developers remain required to comply with the 6% VAT conditions and to regularise tax payments with the Tax Authority if the conditions are no longer met, ensuring correct application of the 6% VAT regime.
Source: Adobe Stock Author: Redaction IMT exemption boosts home buying The exemption from IMT and Stamp Duty on the purchase of a first home for young people up to 35 years old has already benefited around 100,000 young people, according to the Government. This IMT exemption measure has been highlighted as one of the main tools supporting access to housing, helping reduce upfront costs when buying a home. The impact of the IMT exemption is reflected in the real estate market, with average transactions around 200,000 euros. Many beneficiaries are middle-class young people, including doctors, engineers, workers and entrepreneurs, who were able to buy homes through this housing support. Government aims to complete Construir Portugal programme The Government intends to complete the implementation of the Construir Portugal programme by the end of the summer, reinforcing several housing-related measures. The goal is to consolidate housing policies, including legislation on real estate mediation, condominium management and housing cooperatives. The IMT exemption is part of a broader set of housing policies that the Government considers essential to increase supply and improve access to housing. According to the Housing Minister, the housing programme should be fully implemented in the coming months. Among the measures in preparation are also new rules for modular construction, which could scale up the sector and strengthen the response to growing housing demand. Housing fiscal package sparks debate The so-called housing fiscal package, which includes tax benefits such as reduced IRS for moderate rents and reduced VAT on housing construction, took around eight months to progress through the legislative process. The IMT exemption was one of the measures that advanced more quickly, contrasting with other housing policies that remained under discussion in Parliament for longer. The Government notes that some proposals were modified during the legislative process. Despite delays, the goal of housing policies remains focused on increasing housing supply and creating more affordable conditions for young people. The IMT exemption continues to be highlighted as one of the most effective measures in promoting access to housing in Portugal.
Source: Adobe Stock Author: Redaction National Assembly approves housing tax package The National Assembly approved in committee, on 18 February 2026, the housing tax package proposed by the Government, highlighting the reduction of VAT to 6% on the construction of properties intended for permanent housing. The measure is part of a set of tax changes aimed at strengthening the housing supply and easing the tax burden on families and property owners. The proposal was approved with votes in favour from the Social Democratic Party, the Liberal Initiative, and the CDS – People’s Party. The Socialist Party voted against, while Chega and Livre abstained. Reduction of VAT to 6% with new conditions The reduction of VAT to 6% on the construction of properties for permanent housing underwent changes compared to the initial version. The application of the reduced VAT rate is conditional on the property being used as the buyer’s permanent home and on the buyer remaining in the property for a minimum period of 12 months. If the property is not intended for permanent housing, or the owner does not remain in the property for the required minimum period (except in exceptional circumstances provided for in the IRS Code), an increase of 10 percentage points in IMT will apply. These changes aim to ensure that the 6% VAT effectively benefits those who purchase a home for permanent residence, preventing abusive use of the tax regime. Additional measures in the housing tax package The approved housing tax package also includes the exclusion of capital gains taxation on the sale of residential properties when reinvested in the acquisition of properties for rental purposes. The increase of the IRS deduction limit on rents paid by tenants was also approved, rising to 1,000 euros per year. In addition, a reduced autonomous IRS rate of 10% applies to rental income derived from housing rental contracts. IMT and Stamp Duty exemptions reinforce incentives The new housing tax package also provides for exemptions from IMT and Stamp Duty on the acquisition of properties intended for rental or sub-rental. With the reduction of VAT to 6% and the other tax measures, the Government aims to stimulate the construction of permanent housing, increase rental supply, and promote greater stability in the real estate market. The impact of the 6% VAT and the new rules will now be monitored after final approval in plenary.
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