Purchase costs explained for puchasing property in Portugal

With the ownership of real estate in Portugal, property taxes are, unfortunately, part of the package. In Portugal, when buying a property, you have a few taxes which must be accounted for on top of the purchase price.

Based on the price of the real estate, you will have the following taxes:

For a property purchase above 523.000 euros, there is a flat fee of 6% IMT purchase tax.

There is a stamp duty of 0,8%

Registration and other legal fees, approximately euro 500,-

Lawyer’s fees are in general 1%, but depending on the purchase price can be approximate.

As a general rule of thumb, calculate on maximum 8% for it to include all purchase costs, lawyer fees and taxes.

IMI Local council tax

The IMI tax, council tax is payable bi-yearly, in April and September, each accounting for 50% of the tax for the year. The taxman in Portugal has 2 valuations, and IMI taxes vary on when your property was valued for the last time. If no valuation has been done for some time you could pay a higher percentage on IMI tax. Whether it is beneficial to update this value you can discuss with your tax advisor or lawyer.

Properties with valuations done by the inland revenue <5 years

IMI 0.2-0.4%

Properties with valuations done by the inland revenue >5 years

IMI .04%-0.8%