IMT - WHAT IS IT?

The IMT (Municipal Property Transfer Tax), is the tax paid to the State whenever there is a real estate transaction, within national territory. It is the most important tax to consider when buying a house, as it is the most expensive, and is paid on the date of the deedexecution.

The value of this tax varies from case to case, applying to the highest of these values: the Taxable Patrimonial Value (VPT) or the deed acquisition value of the property.

The deductible amount, corresponding to the rate to be applied, varies according to three criteria:

• Type of property (urban or rural);

• Location (Mainland or Autonomous Regions);

• Purpose (primary permanent residence or secondary residence).

For tax calculation the following formula is used: IMT = Deed Value or Taxable Patrimonial Value (the higher) x Rate to be applied – Deductible amount.

The payment of this tax occurs in the following situations:

• Purchase of a primary permanent residence with a value exceeding € 104.261,00 in Mainland Portugal or € 130.326,00 in the Islands.

• In the CPCV - Promissory Contract of Purchase and Sale: if the future owner of the property has the possibility to assign their contractual position to another person.

• Inheritance: if one of the heirs receives a share of the inheritance greater than that of the others, the difference is subject to IMT.

• Property exchange: the IMT to be paid is the difference in value between the two properties involved in the exchange. If one of the owners sells their property within the first year after the exchange, they will have to pay the IMT in full within 30 days after the sale.

• Lease with purchase option: applies when the property becomes the property of the tenant or when the lease contract was concluded more than 30 years ago.

• Acquisition of shares in real estate investment funds: IMT is mandatory if the fund's properties are not dedicated to agricultural, industrial or commercial activities, among other conditions.

• Acquisition of social shares or quotas: if one of the holders (or two married or in a de facto union) is the owner of at least 75% of those participation units.

However, the payment of this tax is exempted in the following situations:

• Purchase of a house for primary and permanent residence for less than € 104.261,00 in Mainland Portugal or less than € 130.326,00 in the Islands;

• Properties completed more than 30 years ago or located in urban rehabilitation areas, subject to rehabilitation. Rehabilitation works must start within a maximum of three years from the date of acquisition;

• Buildings for resale, which meet all the requirements required by law;

• Urban buildings intended for the Rental Support Programme, and acquired, rehabilitated or built to be dedicated to the same programme;

• Acquisition of land for construction, intended for the construction of residential properties in which at least 70% of the buildings in horizontal property, or all buildings in total property or autonomous fractions, are dedicated to the Rental Support Programme;

• The property is acquired by entities such as:
  • Credit institutions in enforcement, bankruptcy or insolvency proceedings;
  • State bodies (municipalities, municipal associations, among others);
  • Collective entities with public utility status;
  • Private social solidarity institutions;
  • Religious collective entities.

• When the property has a special classification as:
  • Being of municipal, national or public interest;
  • Being intended for cultural performances;
  • Being the headquarters of diplomatic missions.

• Acquisition of rural buildings for the purpose of first installation of young farmers;

• Rural buildings or part of rural buildings in forest areas covered by a forest intervention zone (ZIF).

In addition to these situations, in August 2024, as part of the New Housing Strategy, the Government launched a measure that exempts IMT and Stamp Duty for young people up to 35 years old who acquire their own permanent home, provided that the value of the property does not exceed € 324.058,00.

Article by Isabel Meireles dated 12 February 2025