he information contained below is believed to be correct as at the time of writing

he 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".

uildings 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 attributed value.

he 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.

ll 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.

pon 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.

roperty 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%.

any 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.