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Buying in Portugal

There are essentially two stages involved in buying a property in Portugal:

  • The preliminary (promissory) stage
  • The completion stage

Each comes with its own set of contracts.

Promissory stage

Once a purchase price has been agreed between the buyer and seller, a preliminary sale and purchase agreement (which will state the agreed price, payment conditions and any other conditions of the purchase) will be signed by both parties. This is called the “Contrato de Promessa de Compra e Venda”.

The Promissory Sale and Purchase Agreement is a private document that must be certified by authorised entities such as lawyers. At the date of execution of the Promissory Agreement, the buyer usually pays a down payment in the region of 20%.

The Promissory Sale and Purchase Agreement can only be executed after the issuance of the construction permit. However, it is quite common for developers to start selling the properties even before having the construction license so in the case of a property under construction, the parties normally sign a reservation contract with various conditions of payment depending on stages of development. This is a document where the buyer pays a reservation deposit to guarantee that the properties will not be sold to another entity.

Completion stage

The completion stage normally happens 3-4 weeks after the completion of the promissory phase and essentially it encompasses the execution and registry of the purchase.

It is at this stage when the buyer must pay any remaining balance and also any taxes due on the purchase. Normally these funds have to be with the Notary before this stage is undertaken.

The execution of the acquisition, which may only occur after the issuance of the Use Permit by the Municipality, occurs when the buyer signs the “escritura” contract, called an ‘escritura de compra e Venda’. The property is then registered (for a fee of €250.00) with the land registry department and also the local tax office.

NOTE: Before you start the process of buying a property in Portugal, it is important that you open a bank account and acquire a tax number (also known as a personal fiscal number).

Tax Numbers

To purchase a property in Portugal, non-residents and non-resident companies must obtain a tax number. If they are non-European, they must have a tax representative in Portugal. The cost to obtain such tax number is approx €10,00 for individuals and €50,00 for companies.

Due diligence

The buyer should conduct their own due diligence prior to the acquisition of the property or of the company that owns the property. Documents that should be analysed will depend on the transaction and the type of property, but normally they are as follows:

  • Certificates issued by the Land Registry Department and Tax Authorities
  • Permits regarding the construction and the use of the property
  • The existence of pre-emption rights over the property should be verified during the due diligence
  • Energy certificate
  • Technical specifications document

The Land Registry certificate

The Land Registry Certificate issued by the Land Registry is the most important document in the purchase of a property in Portugal. All property in Portugal is required to be registered with the Land Registry Department and Tax Authorities. There is a legal presumption that the registered fact matches with the reality.

Property Purchase Taxes

The acquisition of a property in Portugal is subject to Property Transfer Tax (IMT) and Stamp Duty (IS) to be paid by the purchaser prior to the execution of the public deed.

Taxes (IMT and IS) are due on the Transfer Price or on the Tax Value of the property (“Valor Partrimonial Tributáve”), if higher.

Permanent Residences

Property Value

Up to €92,407
€92,407 – €126,402
€126,402 – €172,348
€172,348 – €287,213
€287,213 – €574,323
Over €574,323

IMT Rate 




For second/holiday homes

Property value

Up to €92,407
€92,407 – €126,403
€126,403 – €172,348
€172,348 – €287,213
€287,213 – €550,836
Over €550,836

IMT rate





  • Other urban property, such as building plots or land to build an urban dwelling: 6.5%
  • Rustic property (agricultural land): 5.0%
  • When a company listed in one of the black-listed jurisdictions acquires a property in Portugal: punitive tax rate of 15%. (Note that if a company listed in a white-listed jurisdiction acquires a property, the same rates apply as shown in the table above).

Stamp Duty (IS)

The IS rate applicable is always of 0.8%, independently of the price and the purpose of the property.

Example: For the acquisition of a primary residence for a property of €400,000 the purchaser would pay IMT of €20,964.70 and IS of €32,000.00.

Ongoing property taxes

Ongoing property taxes on real estate owned in Portugal are calculated on the Tax Value of the property (and not on the Transfer Price). Property is subject to an annual tax, called the “Imposto Municipal sobre Imóveis” (IMI) due by the property owner. This tax is due on the Tax Value of the property and the rate could vary between 0.3% and 0.5% depending on the municipality where the property is located. If the owner is an off-shore company the rate applicable is much higher at 7.5%

As a general rule new-build or sufficiently renovated properties may be exempt from payment of IMI for a period of 5 years from the conclusion of the renovation process. Depending on its location a property may also be subject to a small Sewage Tax. In the Municipality of Lisbon for the year of 2015 there is a sewage tax corresponding to 0.8% of the IMI tax.

A property with a Tax Value superior to €1,000,000.00 is subject to an annual tax stamp at the rate of 1%.

Tax on rental income:


  • Individual: 28%
  • Company (including off-shore companies): depends if the company is carrying out a commercial activity which is deemed to have tax exposure in Portugal
    • If so: 21% + 1.5%
    • If not: 25%


  • Individual: 28%
  • Company: 21% + 1.5%

Tax on capital gains:


  • Individual:
    • If resident in the EU: 14% (50% x 28%)
    • If not: 28%
  • Company (including off-shore companies): 25%


  • Individual: normal tax rate (between 14.5% and 48% ), but only on 50% of the gain
  • Company: 21% + 1,5%

For more information on acquiring a property in Portugal, contact one of our experts.