The IMT, or in full “Imposto Municipal sobre a Transmissão Onerosa de Imóveis” is a property transfer tax that must be paid when purchasing property in Portugal. It is the buyer’s responsibility to pay it and this is done in Portugal prior to the transfer of ownership. Indeed, the notary will ask for proof of payment before transferring ownership.
How is the IMT calculated?
To calculate the Portuguese IMT you need to know:
1) the purchase price (excl. the value for inventory)
2) the registered use of the property
3) if you are buying the property as your main residency or as a second home and
4) if the property is located in Portuguese mainland or in the region of the Azores or Madeira islands as these last two regions have a different table.
What property types are distinguished for the IMT calculation?
To determine the type of property, it is important to see the property’s documentation or ask the estate agent about it.
The following distinctions are made:
- Urban property for housing; these are all buildings with the designated purpose of “habitation” or in Portuguese called “Habitação”. This is indicated on a property’s usage licese and/or on its cadastral registration. For these properties, the IMT is calculated according to the IMT table below.
- Agricultural property; for this type of property, the table below is not used to calculate IMT, but a fixed rate of 5% is applied. In Portugal, agricultural land is classified as “rustica”. When buying a property, it may also be the case that the land belonging to the property is split into 2 cadastral articles, one of which is for building and the other is agricultural. The total purchase price is then divided by value between the two articles and two calculations take place to calculate the total IMT payable for both articles.
- Other urban real estate; for example, for commercial properties, building plots, or properties with a touristic license (mostly homes on resorts), a flat rate of 6.5% for IMT is applicable. It does not matter what the value of the purchase price is. Since the registration, or type of property falls under “other urban real estate”, the fixed rate of 6.5% applies.
It is also important to establish whether you are purchasing in mainland Portugal or on the islands of Madeira or Azores, as the islands have their own table for IMT calculation.
The image below shows the tables to calcuate the IMT in 2024 for the mainland of Portugal. A distinction is made between purchasing for permanent residency or purchasing a property as a second home. In the former case, the top table applies and to purchase a second home, the second table applies.
Example 1:
You are buying a detached house in the mainland of Portugal for € 300.000, with the purpose of being your second home, the property has a habitation license from the townhall and the land is solely classfied as urban land; the sum to calculate the IMT will be:
€ 300,000 x 8% – € 11,035.25 = € 12,964,75 total IMT to pay (which is ultimately 4% of the purchase price).
Example 2:
You are buying a detached house in the mainland of Portugal for € 300,000, with the purpose of being your second home, the property has a habitation license from the townhall and the land has two registered articles, one being urban and another one being rustic; first it needs to be established what the value of the urban part is and what the value of the rustic part is and then you can calculate the sum of the payable IMT. Imagine the rustic part has a value of € 40,000 and the urban part has a value of € 260,000, the calculation for IMT is:
€ 260,000 x 7% – € 8,163.12 = € 10,036.88 IMT to pay for the urban part
and
€ 40,000 x 5% (flat rate for agricultural land) = € 2,000 IMT to pay for the agricultural part
total of € 12,036.88 IMT to pay for this purchase (which is 4% of the purchase price)
note: if you buy a property in Portugal inclusive of furniture/inventory, you can contribute a realistic value of the purchase price to the furniture/inventory. A benefit is that this value is not part of the calculation for the IMT. However the value has to be a realistic value for the inventory that you purchase. Also, it is important it is a realistic value as in the future, when you decide to sell, you pay capital gains over the difference of (future) sales price minues previous purchase price. When attributing a certain value to furniture, the purchase price exclusive of furniture is the price used to calculate the capital gains payment. Read more on capital gains in this article.