The IMT (Property Transfer Tax) is a tax paid to the State whenever a real estate transaction takes place within national territory. It is the most important tax to consider when purchasing a home, as it is the most expensive and must be paid on the date of the public deed.
The amount of this tax varies from case to case and is calculated based on the higher of the following values: the Taxable Asset Value or the property’s purchase price as stated in the deed.
The deductible amount, which corresponds to the applicable tax rate, varies according to three criteria:
Type of property (urban or rural);
Location (Mainland Portugal or Autonomous Regions);
Purpose (primary residence or secondary residence).
To calculate the tax, the following formula is used: IMT = Deed Value or Taxable Asset Value (whichever is higher) × Applicable Tax Rate – Deductible Amount
Situations in which this tax must be paid:
Purchase of a primary residence exceeding €104,261.00 in Mainland Portugal or €130,326.00 in the Islands.
In a CPCV (Promissory Contract of Purchase and Sale): if the future owner has the option to transfer their contractual position to another person.
Inheritance: if one of the heirs receives a larger share of the inheritance than the others, the difference is subject to IMT.
Exchange of properties: IMT is payable on the difference in value between the two exchanged properties. If one of the owners sells their property within one year of the exchange, they must pay IMT in full within 30 days of the sale.
Lease with a purchase option: IMT applies when the tenant becomes the property owner or when the lease agreement has been in effect for more than 30 years.
Acquisition of shares in real estate investment funds: IMT is mandatory if the properties in the fund are not designated for agricultural, industrial, or commercial activities, among other conditions.
Acquisition of corporate shares or quotas: if one holder (or two married or in a de facto union) owns at least 75% of these units.
Situations in which IMT is exempt:
Purchase of a primary residence for less than €104,261.00 in Mainland Portugal or less than €130,326.00 in the Islands.
Properties completed over 30 years ago or located in urban rehabilitation areas, subject to rehabilitation works. Renovation must begin within three years of acquisition.
Properties acquired for resale, provided they meet all legal requirements.
Urban properties intended for the Rental Support Program, acquired, renovated, or built for inclusion in the program.
Acquisition of land for construction for residential purposes, where at least 70% of the units in horizontal ownership, or all buildings in total ownership or autonomous units, are designated for the Rental Support Program.
Properties acquired by the following entities:
Financial institutions in cases of foreclosure, bankruptcy, or insolvency.
State bodies (municipalities, municipal associations, etc.).
Legal entities with public utility status.
Private social solidarity institutions.
Religious legal entities.
Properties with special classification:
Declared of municipal, national, or public interest.
Designated for cultural performances.
Serving as the headquarters of diplomatic missions.
Acquisition of rural properties for the first installation of young farmers.
Rural properties or parts of properties located in forest areas covered by a Forest Intervention Zone (ZIF).
In addition to these exemptions, in August 2024, as part of the New Housing Strategy, the government introduced a measure that exempts young people up to 35 years old from paying IMT and Stamp Duty when purchasing a primary residence, provided that the property's value does not exceed €324,058.00.
Article by Isabel Meireles, dated February 12, 2025
