Tax System
1. Transaction Fee
Transaction fees (notary, taxes) are lower than those charged in France and we estimate all fees included a rate of 2% to 8% of the value of the property depending on the amount.
2. IMT tax:
There are different taxes during a purchase. The most important is the IMT (property transfer tax). The payment must be made to the finance department before going to the notary, the proof of this regulation being necessary for the signature of the act. The tax rates are of the order of 2% to 8% depending on the type of property, the purchaser also enjoys tax benefits on the price of property.
IMT Tax Schedule
| PROPERTY PRICE FOR MAIN HOUSING (€) | MARGINAL TAX RATE |
FLAT TAX REDUCTION (€) |
|---|---|---|
| <92.407 | 0% | 0 |
| 92.407-126.403 | 2% | -1.848 |
| 126.403-172.348 | 5% | -5.640 |
| 172.348-287.213 | 7% | -9.087 |
| 287.213-574.323 | 8% | -11.959 |
| >574.323 |
Single rate of 6% |
|
Source: Portuguese Ministry of Finance
| ExAmple 1 | ExAmple 2 |
|---|---|
|
For a villa worth € 550,000, the tax rate is 5.8%, calculated as follows: 550,000 x 8% = 44,000 € Lump-sum tax reduction = -11.959 € Amount of ITM tax payable = 44,000 -11,959 = 32,041 An effective rate of 5.8% |
For a seemingly worth € 150,000, the tax rate is 1.24%, calculated as follows: 150,000 x 5% = 7,500 € Lump-sum tax reduction = -5,640 € Amount of ITL tax payable = 7,500 - 5,640 = 1,860 An effective rate of 1.24% |
Stamp Duty
A stamp duty for registration is applicable on the purchase value for an amount of 0.8%.
This tax is paid by the buyer at the time of the act of purchase and applies to the total value of the property.
If you take a bank credit, there may be additional stamp duty on the loan amount ranging from 0.04% to 0.6% depending on the duration.
2. Local and land taxes
The local property tax is unique and is called IMI. This is the annual property tax, levied on the taxable value of the property. This value is determined by evaluation according to different criteria.
The IMI is annual, emphasizes the constant tax value of the land register and is calculated by multiplying this value by a percentage that can range from 0.4% to 0.7% (buildings) or 0.2% to 0, 4% (urban buildings evaluated by IMI rules).
