Quais os impostos a pagar com a compra de uma casa?

What taxes to pay when buying a house?

When buying a property, you are subject to paying taxes under the Portuguese tax system. Usually, you have to pay the Municipal Property Transfer Tax (IMT) and the Stamp Duty Tax (IS). But what do these taxes represent? Is it possible to be exempt? Find out everything in this article.

24 Oct 20234 min

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To better understand the taxes you will have to face monetarily, read the article next.

When buying a house, you must pay two taxes.

When buying a house in Portugal, it is necessary to pay two taxes: the Municipal Property Transfer Tax (IMT) and the Stamp Duty Tax (IS).  

IMT must be paid before the public deed of real estate properties, and IS must be settled at the time of the deed. But what does each one represent?  

Municipal Tax on Property Transmission  

IMT is the tax that represents the largest slice of the cost cake when buying a house, levied on onerous transmissions of property rights.

In addition to being applied to the purchase of a house, it may also have to be paid in the following situations: early settlement of real estate under leasing, or exchange of properties under the differential value of the exchanged. There are other specific situations in which you may have to settle this tax, as provided for in Article 2 of the IMT Code.

It is still possible to be exempt from paying this tax. In 2023, if you buy a property for own and permanent housing worth less than 97,064 euros, you are entitled to IMT exemption. Also in the following cases:

  • Property acquired by a state agency, public entity, or municipality association/federation of public law; 
  • Property acquired for the headquarters of diplomatic missions, legal entity with public utility status, IPSS or religious legal entity;
  • Property classified as of national, public or municipal interest, or for cultural events;  
  • Building for resale;
  • Property in the process of execution, bankruptcy or insolvency.

The IMT value is applied to the highest value between the deed value of the house or the Tax Asset Value (VPT), and the calculated value depends on the following factors: if it is an urban or rustic building, the purpose of the property (permanent own dwelling or second dwelling), and if it is located in Mainland Portugal or in the Autonomous Regions.

Through these aspects, there is a corresponding rate for you to calculate the amount of IMT to be paid.

Stamp Duty

The Stamp Duty (IS) is the oldest tax in the Portuguese fiscal system and is not exclusive to buying a house. The IS is a general consumption tax, applied in acts where Value Added Tax (VAT) is not applied.

In this case, the IS must be paid on the purchase and sale of the property, as well as on the mortgage (when financing is used).

In the acquisition and sale of the property, IS is paid at the time of the deed, along with IMT, and its value is based on the deed value of the house or the VPT (the higher value). The rate to apply is always 0.8%.

In other words, to calculate the IS, the following formula is applied: Higher value between the deed or the VPT x 0.8%.  

Regarding housing credit, the IS is then also applied to the financing to buy the house. That is, the tax is applied at the time the loan is made. Normally, if the credit has a term of more than 5 years, the IS corresponds to a rate of 0.6%. But when the term is less than 5 years, the rate is 0.5%.  

So, in this last case, the formula to apply is: Housing credit value x 0.6% (or 0.5% when the term is less than 5 years).

These are the two taxes that you will come across during the process of buying a house. Do you have any doubts? Do you want to proceed with the financing process? Poupança no Minuto is available to clarify and accompany you in the loan contracting process. Contact us and access a credit intermediation service at no cost!

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