Portugal has introduced important changes to the IMT (Property Transfer Tax) regime, particularly affecting non-resident buyers acquiring residential property.

Under the new legislation, the purchase of urban properties or fractions intended exclusively for residential use by non-residents is now subject to a flat IMT rate of 7.5%. In these cases, the usual IMT exemptions or reductions do not apply.

Previously, IMT rates varied according to:

- the property purchase price,

- whether the property was intended as a primary or secondary residence,

- and the buyer’s tax residency status.

Exceptions to the 7.5% IMT Rate

There are, however, several important exceptions where the increased IMT rate may not apply.

The aggravated rate may be waived if:

- the buyer is already considered a Portuguese tax resident at the time of purchase; or

- the buyer becomes a Portuguese tax resident within two years following the acquisition.

The same exception may also apply to non-resident buyers who place the property on the long-term residential rental market within the rental limits established by Portuguese law.

In these situations:

- the property must be rented within six months of the acquisition date; and

- it must remain under residential rental contracts for at least 36 months (continuous or non-continuous) during the first five years after purchase.

Impact on the Property Market

The new measures are part of the Portuguese Government’s strategy to improve housing accessibility for local residents and reduce speculative pressure in key residential areas.

For international buyers and investors, these changes make it increasingly important to carefully assess acquisition costs, tax residency planning, and the intended use of the property before proceeding with a purchase in Portugal.