information contained below is believed to be correct as at the
time of writing
first Tax payment that will be made by an property owner will be at the
moment of purchase. This Tax was originally named "SISA" and
refers to a Property Transfer Tax. This name has now been changed to
"Imposto Munipal Sobre Transmissões - IMT" and the amount to
be paid is related to the value declared on the "Escritura"
and the type of property involved in the transaction. The payment is
made to the local Tax office prior to the act of purchase and the
document proving that this payment has been made is necessary prior to
the act of "Escritura".
described for the purpose of "Habitation" is subject to a
scale of band values. This Tax scale is reviewed annually by the State
and at the present time it has a minimum exemption figure of less than
€ 58.409,00, and then rising in bands to the maximum of 10% on an
"Escritura" value of € 161.610,00. Above this figure the
rate maintains fixed at the same 10%. The local Tax office has the
right within 6 months of the date of the "Escritura" to
reassess the declared value, and if applicable, charge the buyers a
further amount of SISA Tax according to their new calculations. This
seldom happens and the buyer can also make an appeal against the new
second Tax that is payable each year after purchase and is the
"Contribucão Autarquica". This Tax can be liken to the
Property Rates that are paid in the UK. The taxable value is
calculated by the local Tax office according to their internal rules
which normally is different to that declared at the "Escritura"
- most times it is recorded as a lower figure. The Tax is divided into
two and paid the following year in two equal sums, the first 50% in
April and the second 50% in the month of September.
property owners that rent their homes to holiday visitors are subject
to paying Portuguese Tax and they should submit an annual Tax Return
in this respect. As the rules in relation to Income Tax are constantly
changing we recommend that a lawyer or an accountant should be
consulted for the latest rulings.
sale of a property there is will be a Capital Gains Tax applied if the
acquisition of the property was after the 1st of January 1989. A rough
guide to this Tax is that the Tax will only be applied to 50% of the
profit from the sale. However, if the this profit is reinvested in a
further residential property in Portugal within 24 months the Tax will
not be applicable.
given as gifts or inherited may be subject to a Tax. The amount of Tax
applied is ruled by both the value declared of the property and the
relationship of the benefactor to the donor or the deceased. The nearer
the natural relationship the lesser the amount whilst a non-related
receiver could pay up to 36%.
owners have decided to make their purchase in an Offshore Company based
in one of the many Tax Free countries. This method has advantages and
disadvantages - prior to purchasing you should consult the Real Estate
and your lawyer.