What is the property Tax in Portugal?

When do you have to pay property tax?

Anyone who owns a property in Portugal on 31 December is in principle liable to pay Property Tax for that year. The Portuguese property tax – which is called in Portugal: Imposto Municipal sobre Imóveis (IMI) - is a municipality tax and gets charged by the Finance office.

The value gets determined on December 31^st for the whole year, and it will be invoiced in April the following year. In cases where the tax exceeds 200 euro it gets charged in two parts, one part in April and one part in November.

When there are multiple owners, the tax will be equally divided amongst the owners.

How is the IMI calculated?

The property tax is based upon the Patrimonial fiscal value"Valor Patromonial" of the property. You can find this "Valor Patrominial" of your Portuguese property on the extract of the tax office, also called "Caderneta Predial". 

Each municipality in Portugal has its own rate for the property tax and municipalities can adjust this per year. The rates for houses vary between 0.3 and 0.5 percent (differs per municipality, see full list of all councils and the applicable 2021 rates here) and the rate for agricultural land is 0.8 percent. If there are homes that were last valued before 2004, a rate applies between 0.4 and 0.8 percent of the registered value at the tax authorities.

How can you pay the tax?

Payment of the IMI can be made in Portugal at your tax office in Albufeira, Vilamoura or Loulé. If you are not in Portugal, you can make the payment via the online platform of the tax authority or via online banking of your Portuguese bank account. When you have online banking from a Portuguese bank account, you can use the reference number on the bill to pay online via the option "Pagamento aos Estados" with your online banking. It is also possible to set up an automatic debit to pay the tax.  See for this the explanation of the Portuguese tax authorities.

Please note: Although the tax authorities now send your tax bills abroad, payments cannot be done by Direct Debit or Bank Transfer from a non-Portuguese bank account. 

Can you get an exemption of payment of property taxes?

Exemption is possible in some cases, but this requires that you are a resident in Portugal.

1) Permanent exemption from IMI: intended for low-income households (up to EUR 15,295 per year), whose property is intended for permanent residence only, and the value of the property does not exceed EUR 66,500;
2) Temporary exemption from IMI: with a term of 3 years, intended for those whose income does not exceed 153,300 euros per year and buys a home with a value up to 125,000 euros. Exemption can be requested for the first 3 years from the time of purchase;
3) Property that is intended for renovation is also entitled to an IMI exemption, this exemption can apply between 3 and 5 years.

If exemption is not possible, maybe you can request a discount?

In addition to exemption options, there are also opportunities to apply for a discount for the IMI. The possibilities for discounts differ per municipality. In some municipalities the following discounts apply:

1) Rented property: 20% reduction (art. 112, no. 7 of the IMI code);
2) Property with energy class A or higher, or of which the class has been increased by two classes after improvement. In some municipalities, these homes can receive a discount of 25% for the IMI assessment (art. 44-B of EBF) for up to 5 years;
3) 30% discount for IMI may apply in areas subject to urban renewal or de-population (Art. 112, No. 6 of the IMI Code);
4) 50% discount for IMI of buildings used for the production of energy from renewable sources (art. 44-A of the EBF); and buildings of public interest, with municipal value and cultural heritage, may also qualify for a 50% discount in IMI (Article 112, No. 12 of the IMI Code);
5) Discount for each child depending on the municipalities, there may be a reduction of IMI in urban properties, intended for private and permanent housing. The discount is 20 euros for those with 1 child, 40 euros for 2 children and 70 euros for those with 3 or more children (Article 112-A of the IMI Code).

To apply for IMI exemption, you can go to the 'Departamento das Finanças' closest to the location of your home or apply directly on the online portal where all options are available. 

When you need any help, just as your WESTMARK contact for advise.