Buying Property in Portugal.

  • Non-Residents & Fiscal Representation

Under current Portuguese legislation, it is compulsory in most instances for non-residents with an income arising in Portugal to have Fiscal Representation. This person is obliged to see the non-residents meet compulsory compliance commitments. As the laison between the taxpayer and the tax authorities, the Representative can also assist guide the non-resident through some of Portuguese bureaucracy.

  • Inheritance Tax

Abolished in January 2004. All family members (spouse, children, grandchildren, parents and grandparents) are exempt from tax gratuitous due to either gift or inheritance. All others are assessed Stamp Duty as flat rate of 10%.

  • Municipal Property Tax

Referres to as IMT, is levied when a property is bought and sold: the transfer for consideration of ownership rights or of partial ownership on real estate (immovable property). The taxable person is the one who acquires the property.

  • Stamp Duty

Payable on deeds, contracts, documents, books, titles, papers and financial operations. This tax is paid by the purchaser. The Stamp Duty is levied on the value of each taxable deed or operation at a tax rate which varies according to the type of deed or operation. For real estate property, a gift or sale is assessed at 0.8%

  • Capital Gains Tax

The notary who conducts the business is required to report the the transaction to the tax authorities. 

Those that make their permanent residence home outside of Portugal pay a flat rate of 25%, which is more than any resident higher rate taxpayer would pay. A Portuguese resident will receive a 50% exemption before the gain is added to their other income and taxed at marginal rates.

If the property is your principal residence, then you can roll over the profit into an new property. There is a three year window to do so: up to one year before the sale and as much as 2 years after. If you invest less than the full amount, the exemption will be on a pro rata basis. In the event that you do not fulfill your declared intentions, an assessment will be made on the entire non-reinvested balance plus interest.

Non-resident companies, whether ŽBlack-ListedŽor `White-ListedŽare assessed at the flat rate of 25%