Real Estate Taxes in Portugal
IMI: Property Tax
IMI is an annual property tax calculated based on the Tax Department’s valuation of the property. Rates range from 0.3% to 0.8%.
- Urban Properties: 0.3% – 0.45%
- Rural Properties: 0.8%
- Properties in Specific Offshore Jurisdictions: 7.5%
AIMI: Additional Property Tax
AIMI is a surcharge on IMI, applicable to individuals and companies owning urban real estate in Portugal. Commercial, industrial, and service-providing properties are excluded. AIMI is calculated on the total taxable value of urban properties owned as of January 1st each year.
Individual AIMI Rates
- Up to €600,000: No AIMI
- €600,000 – €1,000,000 (€1,200,000 for married/cohabiting couples opting for joint taxation): 0.7%
- Over €1,000,000 (€2,000,000 for married/cohabiting couples opting for joint taxation): 1%
These rates apply when properties owned by legal entities are used by shareholders or management, or their families.
Company AIMI Rates
- All eligible properties: 0.4%
- Companies in tax havens: 7.5%
Properties exempt from IMI the previous year are also exempt from AIMI.
Stamp Duty
| Transfer of Ownership | Inheritance/Donation |
|---|---|
| 0.8% of the higher of the transaction or property value. | 10% (exempt for spouses and direct ascendants/descendants). |
Tax Considerations for Residents
Personal Income Tax (IRS) on Rental Income
Rental income is generally taxable for both residents and non-residents.
- Residents: 28% flat rate
- Non-Residents: 28% flat rate
You can opt to include rental income with other taxable income, subject to IRS progressive rates (up to 48%) and possible surtaxes.
Corporate Income Tax (IRC) on Rental Income
Rental income adds to the taxable result for resident and non-resident companies.
| Residents | Non-Residents |
|---|---|
| 21% (plus municipal and state surcharges). | 25% (without a permanent establishment). |
Non-Habitual Resident (NHR) Regime
This program offers reduced tax rates and exemptions to new residents and investors on some taxes. Qualified individuals can benefit from a flat 20% income tax rate and global income tax exemptions.
Eligibility
Available to those who haven’t been Portuguese tax residents in the last five years.
Conditions
You must become a tax resident in Portugal, either by having a permanent home or spending over 183 days in a calendar year. The regime is available for 10 years and is not extendable.
How NHR Taxation Works
NHR taxation distinguishes between domestic and foreign income.
Domestic-Source Income
A 20% tax applies to income from “high-value-added” activities in Portugal. Other income is taxed at the standard resident rates.
Foreign-Source Income
Employment income taxed in the country of origin (according to tax treaties) is exempt. Income from high-value-added activities, royalties, rent, and capital gains may also be exempt, provided they can be taxed in the source country. Occupational pension income may be exempt as well, provided it is liable to tax in the source country.
