Property Taxes in Portugal

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Today we are going to discuss the different costs when buying a property in Portugal
There are several taxes that you need to be aware of. The main ones are:
Imposto Municipal sobre Transmissões Onerosas de Imóveis (IMT), and Imposto do Selo (Stamp Duty).
The IMT is a tax used on the transfer of real estate properties, including houses and land. The calculation of IMT depends on various factors, including the property value, the purpose of the property , and the applicable tax rates. To calculate IMT we need to determine the Property Value which is usually the declared purchase price or the property's value with the tax authority, whichever is higher.
Also Different tax rates apply based on the purpose of the property. In Portugal, properties are categorized as primary residence (habitação própria e permanente), secondary residence (habitação secundária), and other properties (for example for investment).
The IMT rates are progressive, meaning that the tax rate increases as the property value increases.
Depending on the property's purpose and characteristics, there may be deductions applied to the calculated IMT. These deductions can include allowances for dependents, property location, and other specific circumstances.
The calculation formula is as follows: IMT = Property Value × Applicable IMT Rate - Deductions
It must be paid to the Portuguese Tax and Customs Authority within 30 days after the signing of the sales agreement or the deed of transfer.
The Imposto do Selo (Stamp Duty) Is a tax that applies to various legal acts, including property transactions. It is calculated based on the property value or the contract value. The tax rate for property purchases is 0.8% of the property value or contract value.
There are also other costs that you should be aware of, you will need to pay a Notary, Solicitor or lawyer on average 500e for the property deed and you will also have to pay around 200e in other costs to transfer the register of the property to your name.
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