Portugal property tax for foreigners: on the way in, every year, on the rent, on the way out.
// Short answer
A non-resident owner in Portugal meets tax at four points. On purchase: since 25 May 2026 a flat 7.5% IMT on a home, refunded down to the normal bands if you become tax-resident within two years or let at a moderate rent, plus 0.8% stamp duty. Every year: IMI at 0.3% to 0.45% of the tax value, and AIMI above EUR 600,000. On residential rent: a flat 25%, or 10% on a moderate-rent lease. On sale: half the gain, taxed at progressive rates of 12.5% to 48%.
What happens to the property when the owner dies: which law applies, the tax on the heir and the deadlines: inheritance and probate for Portuguese property.
Rules and rates as of September 2026. Short-term letting rules are set by each municipality and change often, so check the dated items again before you sign. Every figure links to its source.
On this page
What taxes do you pay when buying property in Portugal?
IMT, the municipal transfer tax, and 0.8% stamp duty. Since 25 May 2026 a non-resident buying a home pays IMT at a flat 7.5% of the whole price, with no exemption or reduction (Decree-Law 97/2026). Tax residents pay the 2026 bands: for a second home, 1% to 8%, a flat 6% from EUR 633,931 and 7.5% above EUR 1,150,853. Both taxes are reported to be charged on the higher of price and tax value.
Who pays 7.5% and who pays the bands. The test is tax residence under Art. 16 of the IRS Code, not nationality. A buyer already tax-resident in Portugal pays the bands. A non-resident pays a flat 7.5% of the whole price on a home (Decree-Law 97/2026, IMT Code Art. 17(10), in force since 25 May 2026). If they become tax-resident within two years of buying, or within six months let the home at a moderate rent and keep it let for at least 36 months in the first five years, they can ask the tax authority to refund the difference, within six months of becoming resident or signing the lease.
A buyer resident in a listed tax haven pays a flat 10% IMT. Homes bought subject to IMT are VAT-exempt. Band table: Portugal property buying costs.
Whether you can buy at all, and the steps in order: can foreigners buy property in Portugal.
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What is the annual property tax in Portugal?
IMI, the municipal property tax, at 0.3% to 0.45% of the tax value (VPT) for urban property, with the rate set each year by the municipality. Rural property pays 0.8%. Owners with tax domicile in a listed more-favourable tax regime pay 7.5%.
Rates are tripled for vacant or ruined urban property, and degraded property can be raised by up to 30%. Municipalities can cut rates for let property or raise them in urban-pressure zones.
What is AIMI in Portugal?
An additional IMI on residential urban property and building land. For individuals it is 0.7% of taxable value above a EUR 600,000 deduction, with a marginal 1% between EUR 1 million and 2 million and 1.5% above EUR 2 million. Companies pay 0.4%.
Commercial and industrial property is outside its scope, per a bank's summary. Apart from AIMI, Portugal has no net wealth tax.
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How is rental income taxed for a non-resident in Portugal?
At a flat 25% on residential lets, under Art. 72 of the IRS Code, as of September 2026. Since 1 January 2026 a home let at a moderate rent, up to 2.5 times the national minimum monthly wage, is taxed at 10% instead, on rent earned until the end of 2029. Other rental income, such as commercial, stays at 28%. Only residents of another EU/EEA state can opt for the progressive resident rates instead. A non-EU resident has no such option.
- Long leases: the rate falls by 10 points for 5 to 10 year contracts, 15 points for 10 to 20 years and 20 points for 20 years or more.
- Filing: non-residents declare the rent on the annual IRS return (Modelo 3), on net income after deductible expenses, per a bank's summary.
- Withholding: a tenant that is an entity with organised accounts withholds 25% of gross rent as an advance payment.
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What is capital gains tax on Portuguese property for non-residents?
For gains from 1 January 2023, only 50% of a non-resident's gain is counted. That half is added to income and taxed at the progressive rates, 12.5% to 48% in 2026, with the band set using the seller's worldwide income, on the same basis as a resident.
Before 2023 the treatment was 50% of the gain at a flat 28%. A solidarity surcharge may apply on top at high incomes. The reinvestment exemption for a main home generally does not help a non-resident investor, because it requires the property to have been the seller's own permanent home.
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// Buying in Portugal?
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See the $99 report, page by pageFrequently Asked Questions
Do foreigners pay more property tax in Portugal?
What is IMI in Portugal?
Is rent from Portuguese property taxed if I live abroad?
How much of my gain is taxed when I sell in Portugal as a non-resident?
Does Portugal have a wealth tax?
Header photo: Dale Cruse, CC BY 4.0, via Wikimedia Commons. All credits: image credits.