Tax & Regulation

Property Purchase Tax in Portugal (IMT): Everything Foreign Investors Need to Know About the New Changes

What's new in the law, and how do you know if you're eligible for a refund on your real estate purchase tax? The complete guide

Ola Labunets · Updated: 17 September 2026 · 8 min read

Starting May 25, 2026, a flat 7.5% property transfer tax (IMT) will apply to buyers who are not tax residents of Portugal when purchasing a residential property. The law allows you to claim back the amount overpaid compared to the standard progressive tax applied to residents, if the property is meant for rental and subject to meeting the conditions.

IMT for Foreign Non-Residents: What's Changed?

Until now, foreign buyers were subject to the same progressive tax brackets as Portuguese residents. As of May 25, 2026, buyers who are not tax residents of Portugal will pay a flat 7.5% IMT rate on every residential property purchase, regardless of the property's value and without the brackets and exemptions residents benefit from.

How to Get the Difference Back: Eligibility Conditions

If you intend to rent out the property, you can claim back the difference between the 7.5% you paid and the progressive tax a resident would have paid, subject to cumulatively meeting four conditions:

• Moderate rent: The monthly rent can't exceed €2,300.

• Contract signing deadline: The lease contract must be signed within 6 months of the purchase date (the deed).

• Rental period: The rental status must be maintained for at least 36 months, within the first 5 years after the purchase.

• Filing with the tax authority: The refund request must be filed with the tax authority (AT) within 6 months of the condition being met, meaning the start of the rental.

What Actually Gets Refunded?

It's important to understand: the state doesn't refund the full 7.5%. The mechanism refunds the difference between the flat 7.5% initially charged and the progressive (bracket-based) tax that would have applied to a local tax resident.

The refund amount varies with the property price: for properties up to €1.15 million, the refunded amount can range roughly between €10,000 and €17,000. For properties priced above €1.15 million there is no difference to refund, since the 7.5% rate applies equally to residents and foreigners.

Alternative Route: Transferring Your Tax Residency

If the buyer doesn't intend to rent out the property, there's another path to relief: transferring tax residency to Portugal within two years at most of the purchase date entitles them to request a full refund of the tax surcharge they paid, in the same way the refund is granted under the rental route.

How to Apply, and What Happens If You Stop Renting?

1. 1

   Filing the request: Once the lease contract is signed and registered with the tax authority (within the 6-month window from the purchase), you file a tax refund request with the tax authority, based on a copy of the contract (a long-term lease with rent up to €2,300).

2. 2

   Meeting the 3-year commitment: This is an ongoing condition, not a one-time one: you commit to keeping the property rented for a cumulative 36 months, within the first 5 years after the purchase.

IMT Tax Brackets for Portuguese Residents

The tables below show the standard IMT brackets that apply to Portuguese tax residents. This is the baseline against which the refundable difference is calculated.

1. Primary and Permanent Residence (Habitação Própria e Permanente)

These brackets apply when the property is intended to be the buyer's primary and permanent residential address, on mainland Portugal.

2. Second Home / Investment Property (Habitação Secundária ou Arrendamento)

These brackets apply to apartments intended for rental, holiday homes, or any purchase not defined as a permanent residence.

Other Costs and Details Worth Knowing

• Stamp duty (Imposto de Selo): In addition to IMT, a flat stamp duty of 0.8% of the transaction value applies.

• IMT Jovem benefit (up to age 35): Buyers up to age 35 purchasing a first home as their primary residence (HPP) are fully exempt from IMT and stamp duty on value up to €316,772. On the portion between €316,772 and €633,453, only partial tax applies, at the 8% bracket.

• Autonomous regions (Madeira and the Azores): Tax brackets are locally adjusted, and exemption thresholds are roughly 20% higher than on the mainland.

• Purchase through an entity in a tax haven: When the purchase is made through an entity registered in a jurisdiction defined as a "blacklisted jurisdiction," the IMT rate is a flat 10%, with no brackets.

This article is based on data from Portugal's official tax authority website (Portal das Finanças), and is current as of the publication date. The rules above are rules of thumb. Before filing a refund request or making a decision based on this information, it's recommended to consult a lawyer or tax advisor.

First published: 17 September 2026

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