Property transfer tax in Portugal: what you need to know

Transferring property in Portugal, much like other countries, comes with its own set of financial responsibilities. Among them is the Property Transfer Tax (Imposto sobre Transmissões Onerosas de Imóveis or IMT). If you're thinking of buying property in the sunny terrains of Portugal, getting to grips with IMT is crucial.

Here, we break down everything you need to know about Property Transfer Tax in Portugal and how Equals Money's international transfer service can simplify the process and assist during the transaction.

What is the Property Transfer Tax (IMT)?

IMT is a municipal tax charged on the transfer of real estate properties in Portugal, whether they be urban, rustic, or mixed. The tax applies to both freehold and leasehold properties, and the rate can vary based on a multitude of factors.

1. How is IMT Calculated?

IMT's calculation is based on the property's tax registration value or the purchase price – whichever is higher. Rates can differ based on the type of property and its intended use:

• Rustic Properties: A flat rate of 5%.
• Urban Properties for Permanent Residency: The rates can range between 1% and 8%, with possible deductions available based on the property’s value.
• Urban Properties for Secondary Housing or Rental Investment: The rates typically lie between 1% and 6%.
• Property purchases by offshore entities: A higher flat rate of 10% is applied.

Always ensure to check the updated rates as they may undergo periodic revisions by the Portuguese government.

2. Exemptions and Deductions

Some properties or buyers might qualify for IMT exemptions. For instance, properties earmarked for urban rehabilitation or properties intended for personal permanent residence below a certain value might be exempt.

3. Why Equals Money for Your Foreign Exchange Needs?

While understanding the ins and outs of Property Transfer Tax is essential, so is choosing the right service for your foreign exchange needs. Here’s why Equals Money is a game-changer:

• Competitive Exchange Rates: Equals Money offers competitive rates for over 100 different currencies, saving you from less favourable exchange rates from traditional payment providers such as banks.
• Fast and Safe Transfers: We prioritise your safety, ensuring all transactions are secure. Plus, we offer same-day and next-working-day transfers, ensuring timely property payments.
• Dedicated Support: Got questions? Our team of experts is on hand to provide guidance every step of the way.

Final Thoughts

Acquiring property in Portugal can be a dream come true. By acquainting yourself with obligations like the IMT and aligning with efficient services like Equals Money, you're setting yourself up for a seamless property buying experience. Explore the world, invest wisely, and let Equals Money be your financial companion in your international ventures.