Costs and Taxes When Buying Property in Portugal

Introduction

Buying property in Portugal is a relatively straightforward process — but understanding the total cost of ownership is critical. Beyond the price of the home, buyers should budget for taxes, legal and notary fees, and optional costs like mortgages or currency exchange.

This guide breaks down every major cost — including IMT, Stamp Duty, IMI, AIMI, legal fees, and more — so you know exactly what to expect before committing to a purchase.

Summary Table: Common Costs When Buying

Cost Type	Typical Range	When Paid
IMT (Transfer Tax)	1% – 8% (based on price & property type)	Before deed signing
Stamp Duty	0.8% of purchase price	Before deed signing
Notary Fees	€500 – €1,200	At deed signing
Land Registry Fees	€250 – €750	At deed signing
Legal Fees	1% – 2% of purchase price	Throughout the process
Bank Fees (if mortgage)	€200 – €1,000+	When applying for mortgage
Mortgage Registration Tax	0.6% of mortgage value	At deed signing (if mortgage)
IMI (Annual Property Tax)	0.3% – 0.5% of taxable value	Annually (April–Nov installments)
AIMI (Additional IMI)	0.4% – 1.5% (if applicable)	Annually (in September)

1. IMT – Property Transfer Tax

The IMT (Imposto Municipal sobre Transmissões Onerosas de Imóveis) is the largest one-time tax buyers pay at the time of acquisition. It varies based on:

• The declared property value
• Intended use (primary residence, second home, or rental)
• Location (mainland vs islands)

Rates range from 1% to 8%, and some buyers are eligible for partial exemptions, especially for lower-value primary residences.

🔗 Try our official IMT & Stamp Duty Calculator to see how much you’ll pay.

2. Stamp Duty (Imposto do Selo)

This is a flat 0.8% of the property’s declared purchase price. It’s due before or during deed signing and applies to all property transactions in Portugal.

3. Notary and Land Registry Fees

To legally finalize the purchase, you must sign the deed at a public notary and register the property.

• Notary Fees: €500 – €1,200
• Land Registry: €250 – €750

These fees are mandatory and typically paid at the time of signing.

4. Legal Fees

A qualified real estate lawyer protects your interests and ensures a clean, legal transaction. Expect to pay:

• 1% – 2% of the property price, depending on scope and complexity

Services usually include:

• Obtaining your Portuguese tax number (NIF)
• Reviewing contracts and the CPCV
• Performing due diligence (debts, liens, illegal builds)
• Managing power of attorney if you’re abroad
• Handling closing and post-purchase tasks

5. Mortgage-Related Costs (Optional)

If you’re financing your property through a Portuguese bank:

• Bank Setup & Processing Fee: €200 – €1,000+
• Appraisal (valuation): €200 – €500
• Mortgage Registration Tax: 0.6% of loan amount
• Insurance (required): Varies by provider and value

6. Currency Exchange (For Non-Euro Buyers)

If you’re transferring money from USD, GBP, or another currency:

• Bank rates are typically 3–5% worse than market exchange rates
• That can mean €5,000+ in losses on a €500,000 transfer
• Specialist FX companies offer better rates and lower fees

💡 We can introduce you to trusted currency exchange partners for secure, cost-effective transfers.

7. IMI – Annual Property Tax

IMI (Imposto Municipal sobre Imóveis) is paid annually by all property owners in Portugal. It’s based on the taxable value (VPT), not the market value.

• Urban property: 0.3% – 0.45% (set by municipality)
• Rural property: 0.8%
• Energy-efficient homes: Some may qualify for reduced IMI (0.2%–0.3%)

Payment Schedule:

• < €100: Paid in April (1 installment)
• €100–500: Paid in April + November (2 installments)
• > €500: Paid in April, July, and November (3 installments)

8. AIMI – Additional Property Tax (Wealth Tax)

AIMI (Adicional ao IMI) is a special tax on higher-value urban residential real estate.

For Individuals:

• First €600,000: Exempt
• €600k–€1M: 0.7%
• €1M–€2M: 1%
• €2M+: 1.5%

Couples filing jointly benefit from a €1.2 million exemption.

For Companies:

• Flat rate: 0.4% on all urban residential holdings

AIMI is assessed annually and paid in September.

9. Optional Costs

Additional costs may include:

• Home insurance (required for mortgaged homes)
• Surveys/inspections (advised for older properties)
• Furniture, renovation, or property management
• Translation services
• Fiscal representation (if you’re not tax-resident)

Final Thoughts

Buying property in Portugal can be an excellent investment — whether for relocation, retirement, or lifestyle. But it’s essential to plan ahead and understand the true cost beyond the listing price.

From IMT and Stamp Duty to legal and banking fees, costs can add 6–10% or more to the transaction. For high-end buyers, AIMI (wealth tax) and currency conversion losses can also make a big difference — unless properly planned for.

Knowing these figures up front ensures:

• And a smoother, fully legal process from start to finish
• No surprises at closing
• Smarter negotiations

FAQs