Portugal Property Transfer Tax (IMT) - The Sovereign Group (2024)

FAQs

What is the IMT property transfer tax in Portugal? ›

The IMT in Portugal can range from 0% to 10% depending on the purchase price of the property, the type of property (rural/urban), location (continental Portugal, autonomous region), and whether the property will be the primary residence or second home.

The IMT (Imposto Municipal sobre as Transmissões Onerosas de Imóveis) is a property transfer tax due whenever a property ownership is transferred. The IMT is always paid by the purchaser of the property and must be paid before signing the final deed of sale.

PROPERTY transfer tax Portugal – BASICS

If the property is located in the Autonomous Region of Madeira or Azores, the exemption applies up to a value of €115,509. For land, the property transfer tax in Portugal is always the same fixed rate of 6.5% for urban and 5% for non-urban properties.

IMT, or Imposto Municipal sobre Transações Onerosas de Imóveis, is a property transaction tax paid by the buyer when there is a real estate property ownership transfer in Portugal. The IMT is a property tax for both locals and foreigners.

Put simply, capital gains tax in Portugal is charged on the sale of property or other assets at a rate of 28% for individuals and 25% for companies and non-residents. Residents will need to pay taxes on just 50% of their capital gains.

If you are a non-Portuguese resident, your whole gain from the sale of a Portugal property is taxable at a flat rate of 28%. Portuguese residents are subject to taxation gains from worldwide property and investments which they obtained from January 1st, 1989 onwards.

The gain on the sale of your main home in Portugal is exempt from capital gains tax if the proceeds (net of any mortgage taken out to acquire it) are re-invested in another main home. To qualify, you must declare the amount you intend to reinvest on your tax return for the year in which the property was sold.

Yes, Portugal has a tax treaty with the United States. This treaty helps protect US expats from double taxation. The tax treaty between the US and Portugal is aimed at avoiding double taxation on the same income in both countries.

Non-residents are liable to income tax only on Portuguese-source income, which includes not only that portion of remuneration that can be allocated to the activity carried out in Portugal but also remuneration that is borne by a Portuguese company or permanent establishment (PE).

Transfer pricing rules apply to all companies that engage in related party transactions. However taxpayers who have reached, in the period to which the obligation refers, a total annual income of less than € 10,000,000 are exempt from preparing and organizing the transfer pricing documentation.

How do I transfer ownership of a property in Portugal? ›

Transfer of real estate can be executed through the execution of a public deed with a public or private notary or through an authenticated private document. Subsequently, the transaction should be duly registered with the relevant Land Registry Office.

Property is taxed annually by the municipality in which it is located. Each municipality assigns a patrimonial value and assesses a rate that generally ranges from 0.5% to 1.0%. Rural properties frequently have a higher percentage of assessment but a lower value than urban properties.

To check the status of an IMT, the sender needs to select IMT > STATUS ENQUIRY and provide the IMT ID. This IMT ID is given to the sender during the initiation of the IMT transaction (IMT ID is printed on the ATM receipt and is also sent as an SMS to the sender's mobile number, if provided).

In Portugal the first letter expresses the type of the property; T = Apartment and V = detached house. The number after tells the number of BEDROOMS! (ex. living room, office etc not included) So a T2 is a two bedroom apartment and a V3 is a three bedroom house.

The IMI bill will be sent by post to your fiscal address (the address registered to your fiscal number, or NIF) however, you can view and pay your IMI bill online via the Finanças website, www.portaldasfinancas.gov.pt > but only if you are registered and have a password for it .

As part of the Non-Habitual Resident (NHR) tax scheme, D7 visa holders pay just a 20% tax on Portuguese-sourced income and a 10% tax on foreign-sourced income (which would include foreign retirement and social security payments).

In 2023, 50% of capital gains arising from the sale of real estate by tax residents and non-tax residents in Portugal are taxed at the marginal rates varying between 14.50% and 48% (plus the solidarity rate, if applicable).

You are required to pay stamp duty when purchasing a property in Portugal – unlike other countries the stamp duty is one of the lowest priced taxes you will pay. The rate of stamp duty is calculated at 0.8% of the purchase price. Stamp duty must be paid at the local tax office prior to signing the final deeds.

Can You Buy Property in Portugal as a Foreigner? The short answer is YES! One of the most encouraging qualities of Portugal is that there are no restrictions for foreigners who want to buy a home in the country.

Acquiring the Portugal Golden Visa

Buying property in Portugal allows you to acquire a Portugal residence permit, as long as you stay in the country for a minimum of 14 days each two years.

What is the tax rate for expats in Portugal? ›

Foreigners in Portugal who are classified as non-residents are subject to a flat income tax rate of 25 percent on all their earnings. This means that if you earned €50,000 in Portugal during 2022, you would owe €12,500 in taxes, equivalent to 25 percent of your income.

Estate tax in Portugal

In cases where the deceased donated property during their lifetime instead of bequeathing it, additional taxes may apply. If you sell part of your estate, you may also need to pay property tax or capital gains tax. The tax rate for capital gains is 28%, which covers investment income.

A 1031 exchange is a tax break. You can sell a property held for business or investment purposes and swap it for a new one that you purchase for the same purpose, allowing you to defer capital gains tax on the sale.

How much tax will I pay? As a non-resident of Portugal you will pay tax at a rate of 28%, but only on 35% of the total rental income because the remaining 65% is deemed to be expenses in running the business. This means you are paying an effective tax rate of less than 10%.

Pensions and private pension plans are taxed at 10% in Portugal and not taxed in Spain. There is no wealth tax or inheritance and gift tax on assets outside Portugal.

Since nowadays the IRS declaration can only be submitted electronically, you need to log in to the Tax Office Portal ("Portal das Finanças"). The access to the portal can be done using your tax number (NIF) and password, mobile digital key or with your citizen card.

How long can a US citizen live in Portugal? US citizens may enter Portugal for up to 90 days for business or for tourism without the need for a Portuguese visa. If you would like to move to Portugal and spend more than three months there, then you'll need to get an appropriate visa or a residence permit.

Existing residents

With the correct planning and structuring, you can legitimately create a tax-favourable position and in some cases, single-digit rates of tax, which means that Portugal can still be more favourable than most individual's home countries.

The tax regime NHR in Portugal is granted for a period of 10 years non-renewable, as long as the individual continues to be considered as tax resident in Portugal during each of these 10 years. If for a year the person is not recognized as a tax resident in Portugal, then his status is not lost.

What is the lowest acceptable transfer price? ›

A company may calculate the minimum acceptable transfer price as equal to the variable costs or equal to the variable costs plus a calculated opportunity cost. Most companies will set the minimum transfer price at greater than or equal to the marginal cost of the selling division.

The minimum transfer price that should be set if the selling division is to be happy is: marginal cost + opportunity cost. Opportunity cost is defined as the 'value of the best alternative that is foregone when a particular course of action is undertaken'.

The buying division (transferee) must decide the most they are willing to pay to buy internally, this is called the maximum transfer price. The maximum transfer price is the lowest market price that they could buy the products for from an external supplier.

Passing on Portuguese property to any recipients other than your spouse, children or parents will incur a flat 10% Portuguese stamp duty, wherever they live.

A Deed is the document that transfers ownership of real property. It contains the names of the old and new owners, a legal description of the property, and is signed by the person transferring the property. A transfer of real estate must be in writing to be enforceable.

A property deed is a legal document that transfers the ownership of real estate from a seller to a buyer. For a deed to be legal it must state the name of the buyer and the seller, describe the property that is being transferred, and include the signature of the party that is transferring the property.

As an owner of property in Portugal you will have to pay property tax (Immovable Property Tax, IMI). Each individual municipal has its own rate, and is decided by the municipal assembly. The person/Corporation that owns the property on the last day of the respective tax year is liable to pay the IMI Tax.

It is important to note, however, looking at a year-on-year comparison, property prices in Portugal have seen an increase of 6.5%. To no surprise, Lisbon remains at the top of the list, with property costing an average of €5301/m2.

An IMT usually takes between 2-3 business days to process. It may however take longer depending on your recipient's country and bank.

Step 1: Online Registration: Candidates must fill out the Common 'Application Form' for IMT Ghaziabad, IMT Nagpur, IMT Hyderabad, and IMT Dubai. Step 2: Filling out the Online Application: Fill out the common application form with all the necessary information. Step 3: Payment of Application Form: Pay a sum of Rs.

How do I send an IMT? ›

IMT can be created through Internet banking for that first you have add IMT beneficiary under Profile section-> Manage beneficiary-> IMT beneficiary. A newly added beneficiary, if approved by you between 6:00 AM to 8:00 PM IST will be activated on the same day within 4 hours.

So a T0 means a studio apartment (no separate bedrooms, with bedroom and sitting room combined in the same single room), while a T2 means an apartment with two separate bedrooms (plus a living room). Usually, T0 apartments have a kitchenette while T1 and above apartments usually have a kitchen as a separate room.

A T2 apartment is simply a house that contains two rooms. This is usually a living room (or lounge) and a bedroom. The water rooms (term which includes the closed kitchen, the bathroom and the toilets) are not counted, whatever their size.

The L1, L2, and L3 terminals are where the power wires connect to the contactor. The T1, T2, and T3 terminals are where the device wires connect to the contactor. The L1 contact connects to the T1 contact, the L2 contact connects to the T2 contact, and the L3 contact connects to the T3 contact.

IMT is levied on the transfer for consideration of real estate located in the Portuguese territory. Such transfers may also be subject to Stamp Tax. IMT is due by the purchaser and levied on the purchase price or on the VVPT, whichever is higher.

Property Transfer Tax (Imposto Municipal sobre Transmissôes Onerosas de Imóveis – IMT) is paid by the buyer when there is a transfer of ownership of real estate in Portugal.

Who determines the IMI rates? The municipalities decide each year, which rate to apply in their council. This needs to be between 0.2% and 0.8% for buildings and 0.8% for plots (rustic property). Properties with tax domicile in “offshore” are taxed at 7.5%, regardless of the type of property.

For non-residents, the tax rate depends on the type of income received, as follows: employment income is taxed at a 25 percent flat tax rate. rental income is taxed between 10 and 28 percent special tax rate. interest is taxed at a 28 percent flat rate.

The minimum transfer price that should be set if the selling division is to be happy is: marginal cost + opportunity cost. Opportunity cost is defined as the 'value of the best alternative that is foregone when a particular course of action is undertaken'.

Usually, this rule is restated to say that the transfer price should be no greater than the net marginal revenue of the receiving division, where the net marginal revenue is marginal revenue less own marginal costs.

What are the exemptions for IMI in Portugal? ›

Exemptions: Urban properties that are considered as a permanent place of residence are exempt from IMI for a maximum period of three years from the date of acquisition if the property's tax value is under €125,000 and the taxpayer's annual income is under €153,300.

Foreigners in Portugal who are classified as non-residents are subject to a flat income tax rate of 25 percent on all their earnings. This means that if you earned €50,000 in Portugal during 2022, you would owe €12,500 in taxes, equivalent to 25 percent of your income.

An individual is deemed to be tax-resident in Portugal for tax purposes if he or she spends more than 183 days in a 12-month period in the country, or maintains a habitual residence there. Tax-residents are subject to tax on their worldwide income, while non-residents are taxed on their Portuguese-source income.