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
Properties with valuations done by the inland revenue >5 years