🇵🇹Portugal · Property
Portugal — Property
What it really costs to buy a flat in Portugal: IMT on the progression, IMI on VPT, AIMI for high portfolios, non-resident mortgages, the AL freeze. Q2 2026.
Portugal is cheaper than Germany or France on the way in, and more expensive than Spain on the way through closing. This chapter does not count the listing price; it counts the full out-of-pocket with , the notary, the lawyer and the registry. It also shows where the cadastral works for you, and where the freeze breaks an Airbnb plan.
Two axes: primary or second home, resale or new build
The Portuguese system differs from the Italian one: there is no hard binary between prima and seconda casa. The tax rules apply uniformly to every buyer, but reliefs are tied to two axes: "primary versus second home" (for and rollover relief on sale) and "resale versus new build" (for VAT in place of IMT).
Primary residence (habitação própria permanente)
If you are buying a primary residence to live in, and you register the address with [[finanças|Finanças]] within six months, (the transfer tax) is zero on purchases up to € 92,407. Above that threshold IMT runs on a progressive ladder (see the next section), but the first €92,407 is always exempt. The relief requires not just registration but actual occupancy: the revenue agency can cross-check utility bills and SNS enrolment.
Second home
No exemption. IMT starts at 1 % from the first euro and climbs through a progressive ladder to 7.5 %. This applies to holiday homes, investment flats and any deal where the buyer keeps their primary residence elsewhere. Annual is no different, but once a portfolio crosses € 600,000 in cadastral value, (the surcharge) kicks in.
New build from a developer
A new build from a developer follows a different formula: instead of IMT the buyer pays IVA (VAT) at 23 % on the purchase price (or 6 % for designated social housing). A €300,000 new build therefore closes at a higher tax cost than a resale at the same price: VAT is on market, not on cadastre. For this reason most foreign buyers go second-hand: the tax base is smaller and IMT is softened by the progressive ladder.
What it costs to close
The listing price on idealista.pt is only the base. The actual sum due at escritura (the notarial deed) day sits across five lines: state taxes, the notary, the lawyer, the agency (formally paid by the seller), and the bank if a mortgage is involved.
State
- . A progressive ladder on the purchase price. For a primary residence: 0 % up to € 92,407, then bands of 2 %, 5 %, 7 %, 8 %, topping out at 7.5 % over €1m. For a second home the ladder starts at 1 % with no exempt floor. Computed on the higher of price or VPT.
- (stamp duty) on the purchase: 80 % of the contract price. No exemptions.
- On a mortgage, additional stamp duty on the loan amount: 60 % for terms over 5 years (0.5 % for shorter). Mortgage registration at the runs roughly €250.
Notary and lawyer
A Portuguese notário is a public officer. The fee is generally flat: € 800-€ 1,500 for a standard flat, by region and complexity. The bill covers escritura pública (the deed), registry filing and verification of encumbrances. You may shop notários on price, and you should.
A lawyer (advogado) is formally optional and functionally mandatory for a foreign buyer. End-to-end deal sponsorship from due diligence to escritura costs € 1,500-€ 3,000 flat. The lawyer verifies title, that municipal and condominium dues are paid, that there are no tax claims and that the is current. Without one, the risk of inheriting an unpaid condominium debt or an unresolved estate registration is real.
Agency
Portuguese agency commission is 5 %-6 % plus VAT, formally paid by the seller and baked into the listing price. The buyer does not pay an agent directly, unlike the Italian two-sided model. This leaves room for a 3-5 % negotiation off the asking price, especially on listings that have sat on the market longer than six months.
A worked example for a €300,000 second home, no mortgage: progressive IMT roughly €18,000, Imposto do Selo €2,400, notary €1,200, lawyer €2,000, registry €250. Total around €24,000 on top of the price, or 8 % of the deal. For a primary residence at the same price, IMT drops below €10,000 and the total lands at roughly 5 %. Adding a mortgage adds about €1,800 in loan stamp duty plus €250 in registration plus €300-500 for the bank valuation.
VPT and the cadastral anchor
(Valor Patrimonial Tributário) is the cadastral value of a property in the Portuguese tax register. It drives annual and feeds the progressive ladder when VPT exceeds the contract price. It is neither the market value nor the listing price: VPT typically sits at 60-80 % of market for urban flats, lower still for historic units in small communes.
In practice, the annual IMI on a €300,000 Lisbon flat may land at €700-1,500 rather than the €1,500-2,400 a market-based formula would produce. This is the second reason (after the low entry price) why Portuguese property runs cheaper to hold long-term than German or French equivalents.
The downside is VPT updates. The cadastre is reviewed every three years, and a property is sometimes revalued at sale, especially when the prior declaration sat well below market. The buyer should look not only at the current VPT in the but also understand that VPT can rise after the deal and the next IMI may bill on the new base. The lawyer should flag this and price it into the projection.
IMI and AIMI: the annual bill
A Portuguese owner's annual bill stacks three lines: (the municipal tax), TARI (the waste fee), and spese condominiais (common-area costs in a multi-unit building).
- . Urban property: 30 %-45 % of VPT; rural property 0.8 %. The rate is set by each municipality and published annually. Lisbon typically sits at 0.3-0.4 %, Porto at 0.35-0.45 %, smaller communes closer to the floor. Paid in three equal instalments (April, May, November) or in a single payment if under €100.
- (Adicional ao IMI), a surcharge for owners with total VPT above € 600,000 per individual (€1.2m for a couple). Progressive: 70 % on €0.6-1m, 1 % on €1-2m, 1.5 % above. Single mid-priced flats fall well under the threshold; portfolio holders and owners of high-end Algarve villas do not.
- TARI. Municipal waste fee, €60-200 per year for a standard flat. Owed by everyone, primary residence included.
- Spese condominiais. Condominium fees in a multi-unit building: lift, stairs, cleaning, sometimes shared heating. €30-150 per month, so €360-1,800 per year.
- Insurance. Fire-and-water cover is mandatory when a mortgage is in place (€150-400 per year); optional otherwise. Earthquake cover is a separate clause, particularly relevant in Lisbon.
In summary: a primary residence in Lisbon costs roughly €800-2,500 per year on top of the mortgage. A second home costs about the same; the difference sits in IMT at purchase and the absence of rollover relief at sale. Properties with VPT above €600,000 add AIMI as a separate line.
Mortgages: residents and non-residents
Portuguese banks lend to both residents and non-residents, but the terms diverge meaningfully. A resident with documented Portuguese income gets up to 85 % LTV. A non-resident gets 60 %, occasionally 50 %. Terms run to 30 years for residents and 20-25 years for non-residents, age-dependent.
Rates in Q2 2026
Fixed-rate 30-year mortgages currently sit around 4 %-4.5 %. Variable rates link to Euribor (3M or 6M) plus a bank spread of 1-1.5 %, putting the effective APR in roughly the same 3.5-4.5 % range. Mixed-rate products (fixed for several years, then variable) gained share after the 2022-2023 rate shock. From 2025 mortgage burden is regulated: total debt service cannot exceed 50 % of net income for residents, 35 % for non-residents.
What the bank asks for
- and a Portuguese bank account with at least three months of activity.
- Income documentation for 2-3 years: tax returns, employment contracts, company balance sheets for the self-employed.
- Bank valuation of the property, €300-500, paid by the buyer.
- Life-and-property insurance with the bank as beneficiary (around €40-80/mo across two policies).
- A 10 % deposit released into a notary escrow at the signing of the contrato promessa (the binding preliminary contract).
Main banks for foreign buyers: Millennium BCP, Novo Banco, Santander Totta, BPI (CaixaBank group). Caixa Geral de Depósitos (the state bank) accepts foreign applications but runs a notably slower KYC. Bankinter and ActivoBank are better tuned to residents than non-residents. A mortgage broker costs €1,000-2,000 and frequently pays for itself in a 0.2-0.4 % rate improvement.
Paperwork: caderneta predial, certidão, energy certificate
A Portuguese deal is lighter than an Italian one, but three documents are mandatory and must be fresh (no older than 6 months on escritura day):
- : the property's tax record from Portal das Finanças. Lists address, area, year built, VPT, and owner. No notary will sign without a current caderneta. Ordered online for free.
- Certidão permanente do registo predial: a certified extract from the land registry (). Shows titularidade (ownership) and ônus (encumbrances, mortgages, seizures). €15 online, valid for six months.
- : the building's energy-performance certificate, on an A-G scale. Mandatory at sale since 2013. Issued by an ADENE-registered expert for €100-200. Older Lisbon buildings often land in E-G, which feeds straight into power bills and (from 2030) will restrict letting.
Building condition is a separate problem. Dense historical Lisbon stock often has not been renovated since the post-war years: 1950s plumbing, wiring sized for old loads, basements with persistent damp. Before signing, walk the flat with an independent inspector or architect (€300-600 per visit). The brief: roof, services, damp, common-area condition. The money pays for itself on a single finding.
Off-plan purchases (during construction) are common for new builds. The standard payment schedule is 10-30-30-30: 10 % at the promessa signing, 30 % at major construction milestones, the final 30 % at handover. Nothing is collateralised with a bank until escritura, so delay and developer-failure risk are real. Stick to developers with a stable track record (Vanguard Properties, Solyd, Avenue) and have the lawyer verify the building permit and project insurance.
Letting: long-term and Alojamento Local
A Portuguese owner has two markets: long-term residential letting (arrendamento) and short-term letting under . Since 2023 the two markets have diverged sharply.
Long-term rentals
Standard contracts run from 1 yr with automatic renewal. The deposit is 2 mo of rent plus the first month upfront. Landlord tax: residents are taxed at a flat 25 %, reducible by holding period (15 % after 5 years, 5 % after 20), or may opt into the IRS progressive schedule with renovation deductions. Non-residents face a flat 25 % rate.
From 2025 the annual rent uplift in long-term contracts is inflation-indexed and capped, typically at no more than +2 % per year. For the landlord this means the investment compounds slowly. Single-sided early termination is effectively impossible: court proceedings can run for years.
Alojamento Local
is Portugal's short-term letting regime (Airbnb, Booking). Until 2023 it was the main driver of returns in the tourist parts of Lisbon, Porto and the Algarve. From 2023 new AL licences are frozen in Lisbon, Porto and most coastal parishes: existing licences renew and continue to operate, but no new ones are issued. Without a valid AL licence, short-term letting is illegal and fined.
What this means for a 2026 buyer. In Lisbon and Porto, buying "for Airbnb" does not work: without an active AL the model is closed. The only path is to buy a unit with an existing AL and renew. Such listings price 15-25 % above comparable units, and the AL does not transfer with the property on resale (it is tied to the owner and address). In the Algarve, on the islands and in smaller communes, AL issuance continues, but net returns are sensitive to season and management: after a property-manager fee (20-25 %), utilities and taxes, the typical net annual yield rarely tops 4-6 %.
AL taxation: residents pay 28 % on 35 % of revenue (an effective ~9.8 %), or may elect into the IRS schedule. Non-residents pay a flat 25 %. From 2023 a CRR (Contribuição Extraordinária sobre o Alojamento Local) levy of 15-20 % applies in over-pressured zones, further compressing net yields.
Square-metre prices by city
Central square-metre prices, idealista.pt medians for Q2 2026:
- Lisbon5000 €
- Porto3500 €
- Faro3200 €
- Braga1800 €
- Évora1500 €
- Lisbon, centre: € 5,000/m². Premium wards (Chiado, Príncipe Real) up to €7,500/m². Outer wards (Marvila, Olivais) €3,500-4,000/m².
- Porto, centre: € 3,500/m². Cedofeita, Bonfim, Foz. A fast-growing market, up roughly 25 % over 2022-2025.
- Faro, Algarve: € 3,200/m². Seasonal economy; the popular resort parishes (Lagos, Tavira, Albufeira) run €4,000-5,500/m².
- Braga: € 1,800/m². Northern technology hub. Roughly half the Lisbon price with functioning infrastructure.
- Évora: € 1,500/m². Alentejo, UNESCO historic centre. A thin market; listings sit for months.
A €300-500k foreign buyer can realistically buy 60-90 m² in central Lisbon or 90-130 m² on the outskirts; the same money buys 25-30 % more in Porto; in Braga and Évora it stretches to a house or a much larger flat.
Capital gains on sale: residents and non-residents
Portuguese capital gains on residential property work under two regimes by status. Residents: 50 % of the gain (sale price minus documented purchase price plus capital improvements) is added to personal income and taxed on the IRS progression (13.25-48 %). Non-residents: a flat 28 % on the full gain. On larger deals the flat non-resident rate runs a little harder than the resident regime.
The defining relief is the primary-residence rollover. If a resident sells the habitação própria permanente and buys another primary home within 36 months in Portugal, the EU or the EEA, no capital-gains tax is due. The relief also applies to a forward purchase (up to 24 months before the sale). It does not extend to second homes and is not available to non-residents in its original form.
Interaction with . If you buy a flat in Portugal while applying for IFICI, the deal economics shift: foreign income is exempt from Portuguese IRS, raising the disposable income that supports a mortgage, and holding Portuguese real estate does not create a counter-exposure to a foreign-asset tax (Portugal has no general wealth tax, only AIMI on high-value domestic real estate). That combination is unusual in the EU.
Frequently asked
What does it really cost to close a deal in Portugal?
For a primary residence: IMT 0 % up to € 92,407, then the progression up to 7.5 %, plus Imposto do Selo 80 %, plus notary € 800-€ 1,500, plus a lawyer € 1,500-€ 3,000. Total roughly 5-7 % on top for a primary residence and 7-10 % for a second home. On a €300k flat that is €15-30k of closing costs.
Can a non-resident buy property in Portugal?
Yes; no citizenship or residency restrictions. The only mandatory items are a (obtained through a lawyer or directly at Finanças for €100-200) and a Portuguese bank account. Mortgages cap at a lower LTV (60 % versus 85 % for residents) and KYC is heavier: source-of-funds documentation, 2-3 years of tax returns, sometimes an in-person banker interview.
What is VPT and why does it matter?
(Valor Patrimonial Tributário) is the cadastral value held in the Finanças register. Usually 60-80 % of market price. IMI, IMT (when it exceeds the contract price) and AIMI all compute on VPT. Annual ownership tax in Portugal therefore tends to run lower than a market-based formula would suggest.
Is a Lisbon flat a viable Airbnb buy?
In Lisbon and Porto, no: new licences have been frozen since 2023. You can buy a unit with an existing AL and renew it, but such listings price 15-25 % above comparable units and the licence does not transfer at resale. In the Algarve, on the islands and in smaller communes AL issuance continues, but net annual yields after management, tax and seasonality rarely top 4-6 %.
What mortgage is available to a foreigner?
A resident with Portuguese income: LTV up to 85 %, term up to 30 years, fixed rate around 4 %-4.5 % in Q2 2026. A non-resident: LTV up to 60 %, term 20-25 years, same rate or 0.2-0.4 % higher. Main lenders: Millennium BCP, Novo Banco, Santander Totta, BPI. A broker costs €1,000-2,000 and often recoups itself in a better rate.
What is the tax on sale?
Residents: 50 % of the gain (sale price minus documented purchase price plus improvements) is added to personal income and taxed on the IRS progression. Non-residents: a flat 28 % on the full gain. The defining relief is the primary-residence rollover: if a new primary home is bought in the EU or EEA within 36 months, no capital-gains tax is due. Second homes get no rollover.
Verified · 2026-04-15