fbpx

Taxes on real estate in Portugal

The whole issue of taxes in Portugal can be complicated.

Casa Portugal’s team includes an experienced Portuguese accountant specializing in real estate. We will be happy to assist in the entire process in order to optimize it and prevent unnecessary tax payments down the road.

  1. ­ Taxes on real estate transfers in Portugal

    Municipal property transfer tax (IMT)

    Taxable activities

    • transfers of ownership in return or parts thereof ;

    • long-term rent and sublease ( over 30 years );

    • Purchase of shares ( not including shares in public limited liability companies ) in companies that own property , provided that said purchase leads to a shareholder owning at least 75% of the share capital or that the number of members is reduced to two married shareholders ;

    • Contributions to the share capital of companies with a monetary value that include real estate assets or their distribution to the shareholders in the case of liquidation of such companies ;

    • Binding checks in promissory note agreements ;

    ( among other things )

    Taxable people

    • Individuals or legal entities to whom the real estate is transferred , regardless of its tax residency .

    taxable amount

    • The contractual value or the taxable value , whichever is higher .

    rates

    • Municipal properties used for residences – 0-8% ( maximum progressive rate );

    • Rural properties – 5%

    • Other purchases – 6.5%

    • Property purchased by “ tax haven ” residents – 10%

    discharge

    • Purchase of properties for resale by real estate companies

    • purchase of real estate by open real estate investment funds or by a closed armory to the public;

    • ongoing operation of concentration or cooperation ( such as mergers or dissolution of mergers );

    • purchase of an urban property subject to urban rehabilitation ; also

    • Purchase of buildings classified as buildings of national / aggregate / urban interest

    Investment incentive tax regime

    • Companies making relevant investments may receive an exemption from IMTreal estate property that is considered an eligible investment .

    stamp duty (IS)

    Taxable activities

    • Transfers of ownership for consideration or exemptions or parts thereof ;

    • Lease and sublease of real estate assets

    • Liquid assets of real estate investment funds

    Taxable people

    • Individuals or legal entities to whom the real estate property is transferred or , in the case of a lease , the owner of the property , regardless of his tax residency .

    taxable amount

    • The contractual value or the taxable value , whichever is higher .

    rates

    • Transfers of ownership in return or exempt or parts thereof – 0.8% and

    • Free ownership transfers or parts of them : 10% ( in addition to the above 0.8%)

    Exemptions / exclusions

    • Transfers between spouses and between parents and children , with reference to exempt transfers only .

  2. Taxes on real estate ownership in Portugal

    Municipal Property Tax (IMI)

    Taxable activities

    • Ownership , easement or land rights to urban or rural properties .

    Taxable people

    • Individuals or legal entities who are the owner , the owner of the area or the owner of the interest in the property on December 31 of each year , regardless of their tax residency .

    taxable amount

    • The taxable value as determined in the assessment conducted by the tax authorities .

    rates

    • Rural property : 0.8%

    • Municipal property : 0.3-0.5% depending on the municipality where the property is located ;

    • Property owned by an individual or legal entity residents of a tax haven : 7.5%

    discharge

    • A property that is part of a tourist complex ;

    • A property paid for in real estate investment funds from Mashreon Zubri , in pension funds and retirement savings funds

    • Municipal properties considered permanent residence up to €125,000

    Municipal property tax supplement (IMI)

    Tax subject

    • The sum of all assets held in Portuguese territory , except for assets classified as “ commercial , industrial or service “ or “ other “.

    Taxable people

    • Individuals or legal entities who are the owner , the owner of the area or the owner of the interest in the property on December 31 of each year , regardless of their tax residency .

    taxable amount

    • The taxable value as determined in the assessment conducted by the tax authorities .

    rates

    • Private individuals and inheritances : 0.7%;

    • Private individuals and inheritances where the cumulative amount for all assets exceeds €1,000,000: 1%

    • Membership : 0.4%

    • Companies owning properties used for residences for the members of their bodies : 0.7% or 1%, when the amount of properties held by the company exceeds €1,000,000;

    • Properties owned by companies whose offices are registered in tax havens : 7.5%.

    discharge

    • The first €600,000 is exempt in the case of private individuals or inheritances

    • Municipal companies

  3. Taxes on renting and selling real estate in Portugal

IRS _

taxable income

  • Income derived from real estate assets or capital gains from the sale of these assets .

Taxable people

  • Individuals who are tax residents in Portugal :estate income worldwide

  • Non-resident individuals :estate income that is considered to have been received in Portugal

taxable amount

  • Real estate income ( rent ): the sum of the gross rent , minus the documented expenses incurred in maintenance and preservation as well as IMI, if the rental income is taxed together with the remaining taxable income , as well as IS;

  • Capital gains : the difference between the purchase value and the sale value , minus the sales expenses ( broker’s fees ) and expenses incurred in realizing the capital in the 12 years preceding the sale . For residents of Portugal , the capital gain is only considered at 50% of the global value .

rates

  • Income ( rent or capital gains ) for non-residents : 28%;

  • Capital gains for residents : added to the balance of taxable income and subject to progressive tax rates ranging from 14.5-48%;

  • Rental income for residents : 28%. However, if said income is taxed together with the remaining taxable income , a maximum tax rate of 48% applies to taxable income that exceeds €80,000; In this case , an additional tax of 2.5% or 5% will apply to the quantitative part of the taxable income that exceeds €80,000 or €250,000, respectively

Exclusions

  • Exclusion from taxation of tax profits realized in the transfer of an asset to the permanent residence of a taxable person ( tax resident in Portugal ) if said capital gains are invested again within three years , in the purchase of another asset for the same purpose in Portugal or in the European Union or in the company’s media in the European Economic Area ( if and in the latter case , there are exchange of information on tax matters ).

Corporate income tax

Taxable activities

  • Commercial , industrial or agricultural activities , including income from property ( rent ) or capital gains resulting from the sale of an asset ( if the asset is considered inventory for accounting purposes , the income resulting from its sale is considered a profit from current activities ).

Taxable people

  • Legal entities , residents or non-residents who receive income from their activities , including property income ( rent ) or capital gains arising from the sale of property .

taxable amount

  • The taxable profit for corporate income tax purposes consists of the revenues minus the costs incurred , taking into account impairment losses and other approved reductions

rates

  • In the case of capital gains , if they are reinvested in tangible fixed assets until the end of the second year after realization , only 50% of the value is considered for tax purposes .

Taxable activities

  • Non-residents without a permanent establishment : 25%

  1. Taxes on urban rehabilitation

Urban rehabilitation

Tax Benefits

  • IMI exemption for 3 years , renewable for another 5 years ( if granted for a non-commercial lease ) for buildings subject to urban rehabilitation works

  • IMT exemption for the purchase of properties in urban rehabilitation areas , provided that the rehabilitation works begin in the 3 years after the purchase ;

  • Tax deduction of 30% of the costs incurred by the owner in connection with the restoration up to €500

  • The capital gains accrued to residents in the Portuguese area , in relation to the first sale of properties after the rehabilitation , are taxed at a fixed rate of 5%;

  • Rents received by residents in the Portuguese area and in relation to the rent of properties that have been renovated and are in rehabilitation areas , are taxed at a fixed rate of 5%;

  • The properties subject to renovation contracts , in certain situations , are subject to a reduced rate of 6%.

If you did not find here the information you were looking for on taxes in Portugal, feel free to send us a message and we will be happy to help >

Tags
Back to top

Related Posts

Get in touch, call us at 054-8295829 or contact:

  • This field is for validation purposes and should be left unchanged.