in a nut shell
In addition to the value of the property, your home loan incurs other expenses such as taxes, commissions and fees, especially when you receive a home loan. An important slice of these costs is the tax bill paid to the state. Some are unique, charged when purchasing the house, others are periodic.
Two of them are defined by the municipalities.
Find out in this article the nature and calculation of all taxes you will have to pay when purchasing a property.
Transfer Tax (IMT)
This is - as the name implies - a single city tax paid before the official sale of the house. Do not forget to settle it before the scheduled day of signing, the notary requires proof of payment of this tax.
The buyer of the property is responsible for paying the IMT.
The exemption from payment of the IMT is valid for properties whose purpose is permanent housing and whose value of the VPT or purchase price (higher of the two) is equal to or less than 92,407 euros in mainland Portugal.
The reference value for exemption rises to 115.508,75 euros, when the property is located in the Azores or Madeira islands.
Stamp Duty (purchase)
When buying a property you will come across the oldest tax of the Portuguese tax system: the Stamp Duty. This charge is charged to the buyer of the new property at the time of the deed.
Stamp Duty (mortgage)
If you need financing for the purchase of the new home, you pay for this amount of tax, when the loan amount is available in the current account.
Thus, from the moment you receive the requested amount, you will have to bear Stamp Tax on the amount of credit, applicable according to the term of the loan:
Up to 5 years, 0,50%;
More than 5 years, 0,60%
Property Tax (IMI)
One more city tax. This time is periodic, charged every year from May (this change was introduced in State Budget 2019). Payment is due to the property owner on December 31 of the tax year.
That is, if you buy the house before that date, even in early December, you will have to settle IMI the following year. You must count on this expense, whether you use a bank loan or not. IMI is a tax that is imposed on the tax asset value of properties located in Portugal and whose percentage is defined by the municipalities.
To qualify for exemption from this tax, the property you are purchasing must be for your own permanent housing, not to exceed 125.000 euros of VPT and your annual gross household income must be less than 153.300 euros. The same applies if the property is for permanent lease purposes. In these circumstances, the exemption is granted automatically and granted for a period of 3 years.